July 28, 2021 | Stamford, CT — The rotation to value stocks during the economic recovery from the COVID-19 crisis and the rebound in growth stocks just months later provide a reminder of how quickly investor demand can swing with shifts in the economic cycle, and why betting on the “hottest” products can be a disaster for asset managers.

For most asset managers, product development—from idea capture to product release—takes between three months and one year. This commitment of time and resources attached to developing a product underscores the importance of getting the right ideas into the product development process. 

“The constant fluctuations in demand demonstrate the risk of trying to chase trends,” says John Franscioni, Head of Investment Management Research for Coalition Greenwich and author of Robust Product Development Processes for Asset Managers. “Best-in-class asset managers maintain robust product development systems that prepare for the future—instead of trying to predict it.”

To achieve this objective, successful managers implement an ongoing, structured process, bringing together insights, research and expertise from across the organization. A new report from Coalition Greenwich, Robust Product Development Processes for Asset Managers, advises asset managers how to structure their product development efforts to avoid the pitfalls of product proliferation and unsuccessful product launches with a clear process that marries investor demand with the asset manager’s investment capabilities.  

“Amid constantly shifting demand, accurately assessing the external opportunity is the crucial starting point,” says John Franscioni. “However, asset managers that fail to match the external opportunity with robust internal processes risk ending up with bloated product lineups filled with subscale, non-strategic products that have limited future upside.”