Guide to Mutual Fund Software Capabilities

Welcome to our complete guide to mutual fund management software. We’ll start from the beginning, discussing on a high-level which functional areas such software can cover. Then, we’ll go into how different types of software differ, not just functionally but in how they can aid in workflow efficiency (automation) and cost reduction.

Operating model

The illustration below shows five potential mutual fund manager software landscapes (also called “operating models”). From all-in-one to the left, to best-of-breed to the right, and 3 hybrid options in between.

Smooth and flexible workflows is the most important aspect to optimise for. By having your entire daily investment workflows in one system, you’re in a great position to increase efficiency and automate.

Efficiency

The main goal of Limina’s investment management software is to help you spend less time on your daily investment management workflows. There are three components to such efficiency gains:

Automated data import & export (incl. reporting)

There were traditionally two approaches to data import & export for mutual fund software: managed integrations (where the vendor builds and maintains integrations) and database access (where you need internal developers to build and maintain integrations.

Limina launched a 3rd option in 2024: a user-configure import/export tool. This tool allows your team to build imports and exports for orders, trade, cash records, corporate actions, etc, in 3 minutes. Since the tool’s launch, we’ve seen that it automates current integrations and adds nimbleness to add/change/remove integrations.

The most striking effect is seeing how many new imports/exports clients build, that weren’t worth the cost before. Read more about the tool here: https://www.limina.com/configurable-import-export

Exception-based workflows (automation)

Exception-based workflows are an approach to automation where the system performs a task or routine – and notifies a user as soon as something unexpected happens. The system doesn’t try to resolve issues that arise; instead, it just stops the process and calls a team member in. I like to compare it to managing the oil level in your car.

• Manual: you have to check the oil level manually from time to time by opening the hood of the car and checking the oil level.
• Full automation: the car tries to remedy a low oil level by itself, for example, by self-driving to the mechanic – possibly being there when you need it, and racking up a massive repair bill that could’ve been avoided.
• Exception-based: the car continuously monitors the oil level and alerts you should it fall below expected levels.

Smooth & flexible workflows

We often see operations teams and portfolio managers having inefficient mutual fund management software. Examples of symptoms include:

• Having to jump between multiple screens and spreadsheets
• Entering data manually (rebalancing, trading, manual security setup, trade bookings, corporate actions, etc, etc.)

The best mutual fund software enhances productivity through workflows connected in one seamless chain of steps - aided by automation. An example is mutual fund PMS (Portfolio Management Software), where portfolio managers of Limina spend on average 15 minutes in the system daily. Reach out today if you’d like to see a demo of how that’s possible.

Covering all your asset classes

The mutual fund portfolio management software you choose must naturally cover all instrument types and asset classes you invest in. We recommend looking beyond current requirements since you don’t know what might change in your business 3-5 years from now. You don’t want an expansion of investable universe to trigger a costly and time-consuming change of mutual fund software. Assets you might want to consider checking coverage for could include:

Portfolio data you can trust

Trusted portfolio data enables accurate decision-making, e.g. when rebalancing a portfolio. It also avoids the risk of unknowingly breaching a compliance rule or similar.

The two capabilities most mutual fund portfolio software lack are:

• Data Validation: Automated data validation checks ensure consistency and catch errors early. Examples include instrument parameter validation and controls for stale prices.
• An Investment Book of Record (IBOR) that can generate any portfolio view for any use case. Examples include simulated positions and cash for the Front Office in parallell to NAV positions and settled cash for Middle Office Operations.

Mutual fund software price

If you’re concerned with the costs of systems, you’re not alone. According to surveys we’ve conducted over the past couple of years, 70% of mutual fund managers are concerned with their current system costs.

When comparing options, remember that the license fee to a vendor is the easy number to analyse, but it can be far from the total cost. In our cost analysis, we frequently see numbers as low as 1/3 of the total costs associated with a system in the license to the mutual fund management software vendor. Other large expense items include the cost of customisations, integrations and performing workflows manually outside the system.

Quite obviously, there is massive room for improvement here. Read more about ways to reduce system costs.

Service and support

Lastly, there is a significant difference between mutual fund software vendors in how they work with clients in production. It’s likely that the software will be enhanced and that your business will undergo changes (new products launched, affected by new regulations, change of counterparties, etc).

A proactive vendor will dedicate a product export with industry expertise to learn your business. This dedicated client responsible will guide you towards getting the most out of the system from day one - and in the future. A true partnership, and not just a fancy buzzword.