The Monetary Authority of Singapore (MAS) has released data showing that the Lion City continues to grow its fund management industry. The de-facto central bank says in 2001, total assets managed in Singapore grew by 11% to S$307 billion ($171.45 billion), with both discretionary and non-discretionary assets posting gains.
Last year was a lousy year for the funds industry, which struggled against the popping of the Nasdaq bubble and anaemic economic growth. Worse for Singapore, the news was full of anecdotes about fund managers shifting resources to Hong Kong to be closer to the action in Greater China and Korea. So it is a tribute that in difficult times Singapore actually grew its funds industry by a respectable measure.
Nonetheless Singapore also benefited from exciting stories in North Asia by simply being the hub for many global managers, whose Asia allocations rose substantially as investments in the United States as well as Europe lost their shine. Furthermore, many global fund managers closed operations in other Asian capitals and consolidated the business in Singapore.
Of the total assets under management (AUM) of S$307 billion, discretionary asset management grew 9% to S$180 billion ($100 billion). Much of that growth came from domestic institutions, which now account for 29% of Singapore's discretionary AUM. This pool remains largely invested in equities - S$97 billion ($54 billion) - but that proportion is down slightly to 54%, with bonds, balanced funds and money management funds all taking the balance.
And as expected most of these funds are invested in the region, with the lion's share of equities, 62%, invested in Asia ex-Japan, ex-Singapore, and another 13% dedicated to Singapore. Fixed-income investments are more spread out, with 34% going to Singaporean paper but only 15% to other ex-Japan Asian markets.
As grows AUM, so grows the industry. In 2000 Singapore boasted 1,010 investment professionals and last year this grew to 1,114, of whom 47% are equities specialists.
On the unit trust front, AUM rose from S$7.8 billion to S$10.5 billion. As in Hong Kong, structured products guaranteeing principal drove this growth. But Singapore's own policies also contributed. Last spring the government passed its Supplemental Retirement Scheme allowing wealthier citizens to invest more of their Central Provident Fund savings into CPF-approved unit trusts. The number of such funds rose by about 50% in 2001 to 155 and the proportion of CPF-approved funds' AUM to total unit trusts assets rose from 60% to 69%.