Asia's retail funds sales are as large as those in Europe, and roughly half the size of those in the United States, according to a new study by New York-based consultancy Strategic Insight.

Its research shows that worldwide, equity and bond funds raised a net $250 billion during the first six months of 2009, raising expectations that if market trends continue, the year will see that amount double. (The research does not count money-market funds.)

In comparison with recent years this is not a lot: in 2007, investors in Asia alone bought $500 billion or so of equity and bond funds. But in light of poor expectations, market volatility and the breakdown of bank distribution, the numbers are better than most would expect, says Daniel Enskat, senior managing director and head of global consulting at Strategic Insight.

He attributes the positive development to strong performance in equity and credit markets following last year's sharp downturns. "Investor inertia is giving way to renewed trust in the stability of the mutual fund vehicle as the financial tsunami is being downgraded to scattered thunderstorms."

The story comes with regional differences, however. In the United States, which accounts for about $130 billion of net inflows to equity and bond funds, the emphasis has been on bond funds and passive strategies. Pimco has three products in the top 25 biggest sellers in 2009, including $20 billion to its Total Return Fund. ETF and index fund providers such as iShares and Vanguard are also enjoying healthy inflows.

In Europe, the mix between equities and bonds is more balanced. Because of the breakdown of bank distribution, the big mainstream players are not the ones selling the most. Rather, it's boutique managers with strong performance such as France's Carmignac Asset Management, manager of a balanced fund, and UK credit specialist BlueBay Asset Management that are enjoying the strongest inflows.

Asia accounts for roughly $60 billion of net inflows, on par with Europe. The story varies more by country, but it is here - particularly Japan and China - where the biggest fund raisings have taken place, on a global level.

As reported in the July edition of AsianInvestor magazine, Nomura Asset Management has scored a massive success with its multi-currency US high-yield strategy, which has raised about $5 billion (plus another $1.4 billion raised in a tranche outsourced to JP Morgan Asset Management).

Nomura and Diam have also raised $1 billion-plus funds in thematic equity funds, including global semiconductor stocks and global financials.

In China, Changsheng has raised a $2 billion fund, while in July (since the report has come out), China Asset Management has raised nearly $3 billion for an equity index fund.

Throughout Asia, a lot of investor assets are going to Asia Pacific exposures (notably from Japan, where Kokusai Asset Management and Nikko Asset Management have launched such products, and from India, where Birla, HDFC, Kotak and Reliance have been active) and to themes such as technology and global bond strategies.

Enskat suggests this data shows there are now opportunities for boutique and mid-sized fund managers in the West to enter or grow in Asia, because incumbents relying on bank distribution are on the defensive. But this will require more attention to portfolio construction (for example, how to build in ETFs to access certain markets), asset allocation and advice.