After two tenures, AsianInvestor's 2021 Standout CIO Jang Dong-hun looks back on the past six years at Korea's Poba with satisfaction.
The post office, with its huge national branch network, began to sell mutual funds in October 2005, and now has 16 funds on its platform, sold through 1,155 branches. Because of its vast network, its trustworthy reputation and requirement for huge training commitments from fund managers, Japan Post now sells funds to 460,000 people. By its second anniversary as a distributor, it expects to have sold a cumulative Y1 trillion ($8.6 billion) worth of funds to its customers.
To date, however, it has sold mainly conservative, beta-oriented products in domestic and global bonds, equity and real-estate investment trusts. Its top sellers are fund-of-fund platforms offered by Nikko Asset Management and Nomura Asset Management that sell diverse, global income funds.
Japan Post has emphasized products it believes are low cost, good quality, easy to explain and offer long-term gains.
The organisation's long-awaited privatisation is on track to take place this October, following which it will also extend its product range. "We will expand into active funds," says Matsuoka. "The products we have selected so far provide beta market risk."
He says future product types will not be restricted to long-only funds. "We may include long/short funds, structured fixed-income products or market-neutral strategies," he says. "These should be products that minimise investor risks."
Variable annuities are also being studied as a possible product for Japan Post's shelf.
He says the idea is to provide an array of 'satellite' strategies around more conservative 'core' funds.
But the post office will do so gradually. It now offers nine types of asset classes, and Matsuoka envisions this doubling, with two or three new classes added every year or so. They should not only provide active management but also fit into long-term 'lifecycle' needs, to be sold as retirement products rather than for purposes of speculation.
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