Assets under management (AUM) of mutual funds in the Asia-Pacific region reached $1.5 trillion in the second quarter of 2009, up 18% from $1.27 trillion in the first quarter, according to data from Lipper.

Japan, China and Australia have the region's top three spots in terms of the size of their respective fund markets. Combined, those three markets take up more than 60% of the region's fund assets, with Japan's AUM at $359.9 billion and China's and Australia's nearly equal at $317.3 billion and $317.1 billion, respectively. South Korea trails in fourth spot with $159.3 billion in assets.

Net fund inflows in the region reached $3 billion in the second quarter, however, significantly lower than the $26 billion in net inflows in the first quarter.

"Asian investors displayed some reticence to return to funds despite the strong bounce in local indices during the second quarter," Lipper says in its latest Fund Flash Report.

A common trend in the second quarter, Lipper notes, was the move away from safe money market products.

"Risk appetite steadily increased during the quarter, leaving liquidity funds in the red," Lipper says.

While the switch out of money market funds "made sense", it did not translate into significant flows in long-term portfolios, Lipper says, with markets such as Singapore and Korea experiencing redemptions, while China did have some, but barely noticeable, inflows.

With regards to new fund launches, Japan topped the list in terms of net sales in the second quarter, valued at $12.4 billion for 101 funds. China was second at $9.6 billion in net sales for 31 funds. Thailand was in third place at $5.9 billion for 143 funds.

Asia-Pacific fund market ranking in terms of assets (in millions) as of June 2009, according to Lipper:

  • Japan - $359,882.5
  • China - $317,296.1
  • Australia - $317,103.5
  • South Korea - $159,354.8
  • India - $109,931.5
  • Taiwan - $57,257.5
  • Singapore - $52,846.1
  • Hong Kong - $43,176.2
  • Thailand - $5,233.2
  • Malaysia - $26,364.8
  • Other markets - $23,374.6
  • Total - $1,504,509.4