The size of the assets being serviced by global custodians operating in Asia-Pacific peaked in June this year at approximately $6.6 trillion, according to figures provided by custodian banks to AsianInvestor.

This represents a growth rate of roughly 20%, from $5.5 trillion of assets under custody from last year, according to data from seven banks.

These figures are approximate and represent both cross-border custody of Asian-owned assets as well as for inbound assets managed by broker/dealers and global investors.

Although the precision of the numbers is questionable, as a thumbnail sketch of the business of cross-border portfolio investments, it shows a remarkable growth of activity both in and out of Asia markets, at a time when market valuations and market equity indices worldwide have struggled.

In short, these represent real net gains in both directions, both in terms of the size of Asian investments out of home markets, as well as the demand among global investors and financial institutions to gain exposure to Asia-Pacific.

The numbers do not, however, make distinctions between Japan, Australia and the rest of Asia. Nor do we have sufficiently exact estimates of breakdowns among custodians’ client segments.

The data is based on figures provided to AsianInvestor by Brown Brothers Harriman, BNY Mellon, Citi, HSBC, JP Morgan, Northern Trust and State Street.

In the case of Citi and HSBC, we excluded assets under custody gleaned from their sub-custody businesses, focusing only on assets gleaned from pure third-party custody or broker/dealer accounts.

To avoid double counting, we also excluded assets from sub-custodian providers Deutsche Bank and Standard Chartered. And we did not look at assets under custody among local banks, whose businesses primarily cater to domestic clients and do not capture cross-border flows.

Given the complex nature of global custody, there is undoubtedly double counting in our figure, which admittedly has a back-of-the-cocktail-napkin element.

Each bank’s business model varies. A broker/dealer relationship is likely to involve clearing on a local exchange for an international client, but in some cases may also represent the biggest, most sophisticated Asia-based clients, including sovereign wealth funds, which operate their own brokerages.

Some custodians focus their attention on Asia-based institutional investors, such as central banks and pension funds; others may target mutual-fund complexes and insurance companies. And others may count assets they look after on behalf of global fund managers or institutions that are investing into Asia-Pac markets.

By simply adding up their assets-under-custody totals (and subtracting assets taken from internal sub-custody networks), however, we can get a general sense of portfolio activity in and out of Asia.

The growth of these businesses at a time when market benchmarks are down shows the extent to which underlying activity remains robust. Roughly speaking, these numbers suggest that Asian investors – retail, institutional, high-net-worth – continue to allocate more across borders, in absolute net terms; and that global investors, be they buy-sides or financial intermediaries, are similarly ratcheting up allocations to Asia.

One final caveat, however: banks tended to provide us with numbers from the summer, before the August-September dive in many emerging-market equities and currencies. Gains and losses in assets under custody have as much to do with valuations as net flows. Therefore the numbers given to AsianInvestor probably represent a high-water mark for the industry.