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Funds in Asia Capture $215 Billion in First Half of 2007, with Flows Running at Twice the Pace of Last Year
NEW YORK, 16 August 2007 --- The growth of the investment industry in Asia accelerated strongly in the first half of this year, with $215 billion of net flows going to mutual funds, driven especially by progress in Japan and China, but also notable gains in markets such as Korea, India, and Thailand. Overall, net flows in the region are running at twice the pace of last year's record results. Including estimates for Australia, and Europe-based offshore funds sold in Asia, total net inflows in the region approached $250 billion in the first half of 2007.
"It is difficult to understate the expansion taking place in Asia; by all measures, the funds business has ramped up with remarkable strength, benefiting many international money managers that have established a presence there, along with local providers," commented Jag Alexeyev, Managing Director and Head of Global Research at Strategic Insight.
"While the global financial market declines of July and August, stemming from the U.S. subprime loan problems, may impact the Asia funds business in the near term, the underlying momentum from a long-term perspective is powerful and likely to be sustained."
Continuing demand for global allocation, real estate, infrastructure, and dividend products in Japan, and an exceptional surge of new product launches and flows in China in the second quarter, were among the main drivers of expansion in the region. Other themes included bond and liquidity funds in India, and real estate and infrastructure in both Korea and Taiwan, according to Strategic Insight's Asia FlowWatch report, which tracks the top selling funds and new products in each of the region's key markets on a monthly basis.
While mutual funds in Europe captured a similar level of net inflows ($220 billion) in the first half of 2007, two-thirds went to money market and cash plus programs; and with the recent NAV declines and closure of cash plus and other funds, asset gathering will be even more difficult during the second half of the year in Europe.
As another sign of the global shifts taking place, equity and balanced fund net flows in the first half were greater in both Japan ($75 billion) and China ($65 billion) than in Luxembourg and Dublin ($45 billion combined), the main offshore centers for equity products in Europe.
About Strategic Insight
Strategic Insight is a research firm offering industry perspective, data, and analysis on mutual funds across Asia, Europe, and the U.S., with close to 300 of the largest fund and asset management companies around the world as clients.
Contact:
Jag Alexeyev
Managing Director, Head of Global Research
STRATEGIC INSIGHT
590 Fifth Avenue, New York, NY 10036
Tel: +1 (212) 944-4456
Email: Jag@sionline.com
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