Every year, AsianInvestor's editorial team conduct an intensive analysis of the region's leading asset management service providers, fund products and asset managers, to ascertain the top organisations of the previous 12 months.
The winners of these categories must combine a mixture of business performance, growth and progress, measured on both quantitative and qualitative criteria. Below, we detail why we chose the first half of this year's winners of our market award categories, which comprise the top fund houses in each major market.
Shinhan BNP Paribas Asset Management
Shinhan BNP Paribas Asset Management had a strong 2018 for asset growth. All-told, the fund house expanded its assets under management (AUM) by 12.2% during the year; a level that was notable higher than its peer rivals.
The growth came from new retail products supporting continuous high inflow of capital from some of Korea’s major pension funds. In addition to this Shinhan BNP secured five new mandates from institutional investors, which helped to bolster the institutional capital that made up 80% of its AUM as of the end of last year.
One notable success was in March 2018, when Shinhan BNP won a mandate for a waste management fund; it was appointed to be the fund of funds (FoF) submanager for the Korea Radioactive Waste Agency. That is an ultra-long-term business that will last until 2140 and is expected to grow its capital gradually, and is estimated to possess W4.65 trillion ($3.91 billion) in 2020.
Shinhan BNP also launched a number of very diversified products for clients, pre-empting their needs to diversify both domestically and overseas. These included a domestic hedge fund FoF product as well as a fund focusing on both Korean and Chinese technology firms.
AmFunds Management made some big innovation steps during 2018, on top of launching several new fixed income products – expanding its bread and butter funds during a year in which they provided the best relative performance in a turbulent year for equities.
In August, AmInvest launched Malaysia’s first robotech fund. The aim was to gain exposure to growth companies globally, with the ambition of capital appreciation long-term and equities diversity for investors.
It followed this in September by rolling out its inaugural Environmental, Social and Governance (ESG)-compliant global equity fund, as part of its effort to push the ESG agenda on behalf of investors with a rising focus on these investment factors. To cater the Muslim part of Malaysia’s society, the fund is also Shariah-compliant.
The new products were a part of a year where assets under management (AUM) from institutional investors grew by 5% and made up 48%. In spite of a challenging investment environment in 2018, AmInvest managed to grow its AUM overall, also within unitrust clients and a newly started retirement scheme business.
In the latter, the asset manager has, as a relative late bloomer among its peers, launched a focused effort to reach younger new pension savers via an online platform.
BDO Trust and Investments Group
Despite the challenging nature of last year, BDO Trust and Investments could boast some strong successes. For a start it was able to grow its assets under management (AUM) over 10%, to hit $22 billion. The company continued to launch feeder funds during 2018, as well as launching a global equity-indexed fund. These new products widened its range of feeder funds from index to actively managed funds, now moving into emerging markets.
BDO Trust and Investments had called for investors to diversify away from peso-based UITF products for five years. Its urging and preparations for that scenario paid off last year, as investors starting to demand more diversity as both the Philippines' domestic markets and for the value of the peso suffered. It also succeeded in part because it had taken the time to continuously educate retail investors who had until recently been hesitant to invest offshore.
While growing from a relatively low asset base, BDO's overseas feeder funds products grew with 90% year-on-year, showing that it was correct to have faith in overseas diversification as a product for the future for Philippine investors demands. As stringent regulations on investment start to loosen up and more institutional investors diversifying, the market for overseas investment products are set to grow even further.
JP Morgan Asset Management
JP Morgan’s Singapore unit serves a wide range of investors encompassing retail, sovereign and corporate clients in the city-state and Southeast Asia and beyond (it also acts as a sub-regional hub for Southeast Asia). Its assets under management (AUM) in the region grew by a high-single digit figure last year to reach over $17 billion, outperforming most of its market peers.
Last year, the US fund house expanded the outreach of its best-selling funds across different asset classes to more retail and private banks, insurance companies and independent financial advisory firms, while keeping up its commitment to raising investor education.
Almost 80 of the funds it offered in Singapore received four or five-star ratings from fund research provider Morningstar, an improvement of 13% versus 2017. Among them was JP Morgan AM's Asean Equity Fund, whose AUM grew 9% to reach $569.3 million by the end of 2018, while its Vietnam Opportunities Fund increased by an impressive 29% to hit $303.6 million during the year.
The fund house also secured a new investment agreement with one of the top tier investment-linked policy providers in the country, serving as a testament to its investment capabilities.
Spearheaded by the Singapore office, JP Morgan AM built its presence across Southeast Asia through feeder fund structures. AsianInvestor recognises its continuing efforts to grow the business in the region despite difficulties such as language barriers and different legal systems.
Cathay SITE made several remarkable achievements in 2018. Firstly, its total assets under management (AUM) grew by 19.3% year-over-year to reach $18.77 billion at the end of 2018, despite the volatile market conditions seen particularly towards the end of the year. AsianInvestor appreciates the fact that a large portion of the fund house's AUM is sourced from external clients too and not the affiliate company Cathay Life.
In addition, Cathay SITE was among the seven domestic asset managers to be awarded a $1.4 billion passive environmental, social and governance (ESG) mandate from state pension fund Bureau of Labor Funds, in addition to obtaining several investment mandates from other institutional investors such as Japan’s Nippon Life.
Cathay SITE also launched the first multi-national smart beta ETFs in Taiwan, including the Taiwan Low Volatility 30 Index. The product which has year-end total return that beat broader market indexes by large margins. Added to this, the fund house also set up a subsidiary that in turn launched the first private equity fund from a fund house in Taiwan.
The private fund was delayed on its rollout, but AsianInvestor recognises Cathay SITE’s efforts to liaise with the local regulator to launch the product. It invests into industries that support sustainable development and economic growth in Taiwan. It evidently hit a vein of interest from investors; the private fund subsequently received fixed investment amount of $260 million from investors, mostly insurance companies, marking a milestone in the domestic asset management industry.
Krungsri Asset Management
Similar to many markets, Thailand suffered market jitters during 2018. But Krungsri Asset Management navigated them well, ensuring that it could expand its assets under management (AUM) by 8% to reach Bt502.7 billion ($15.77 billion) by the end of the year, a stellar performance compared with its peers in the category.
The growth was particularly evident in the private fund space, in which it built its AUM by 51.6% to reach Bt112.8 billion, reflecting the trust from institutional investors and high net worth individuals for the fund house.
In 2018, Krungsri AM was also one of the three asset management companies to have been appointed by the state-owned Government Pension Fund to manage some of its equity funds, another testimony of its strong investment capabilities.
Although the domestic fund house lacks the inhouse expertise to launch funds with overseas underlying assets, it has been expanding its range of offshore investment solutions by selecting the best-in-class funds from international asset managers through rigorous processes. These include a China A-share equity fund and a Vietnam equity fund, which help local investors to diversify their portfolios.
AsianInvestor also recognises Krungsri AM's its efforts to successfully add four new distribution agents during the year to reach a broader base of potential retail investors. In addition, the fund house helped organise a large number of seminars to educate investors on areas such as tax planning.
AsianInvestor chose not to include a market award for Vietnam.