Overall assets under management sourced from Asia Pacific grew last year at a slower pace than in 2013, but managers in Asia (excluding Australia and Japan) saw their overall AUM grow 13.34%, a two-percentage-point rise on the increase in 2013. This was according to AsianInvestor’s annual survey of the 100 biggest fund houses by Asia-Pacific assets.
Chinese and Indian asset managers were notably successful in terms of AUM expansion, accounting for 10 of the 20 fastest risers in the list of 100 last year.
Not a single Indian firm had featured in the 2013 list of the fastest growing firms, but there are four in the latest rundown. This is testament, no doubt, to the boost delivered to sentiment and markets last year as new prime minister Narendra Modi inspired confidence among domestic and foreign investors alike.
Dinesh Khara, chief executive of SBI Mutual Fund, suggested this was no flash in the pan. “The new government seems to have reinforced the confidence of the investment community in taking decisions. This is a long and different change in economy; it is not momentary.”
SBI Mutual Fund posted the second fastest AUM growth among Indian fund houses – a 39% rise to $15.1 billion, driven by flows into balanced funds, structured notes, fixed income and money-market products.
Strong equity-market performance had lured corporates to put money into mutual funds, said Khara. The firm also opened 51 new offices across second-tier – or ‘B15’ – cities, which helped to drive fund distribution. Looking ahead, Khara said the improvement in India’s economy in fiscal terms and the 75-basis-point rate cut in January meant longer-duration funds would become more popular. It plans to focus on this in the coming months.
Meanwhile, China’s mutual fund industry grew at its fastest pace for seven years in 2014, with AUM rising 52% year on year to end 2014 at Rmb4.56 trillion ($733 billion), according to China Galaxy Securities.
However, the growth was overwhelmingly driven by money-market funds. China’s 427 MMFs surged 150% last year to hit Rmb2.2 trillion. But returns of 52% for the benchmark CSI 300 stock index last year will also have helped fund inflows and performance.
Tianhong Asset Management was the standout story of 2014. It became the biggest mainland fund house in the space of a few months on the back of its Yu’E Bao MMF pulling in $90 billion in flows via online payment platform Alipay.
China remains heavily driven by fads, short-term sentiment and the expectation of effectively guaranteed high returns. That said, the runaway success of Yu’E Bao has highlighted the potential of digital delivery of funds on the mainland, and elsewhere. Nevertheless, AsianInvestor believes the pace of MMF growth in China has peaked.
However, passive products were a strong driver of investments into China this year. For example, China Southern – which, aside from Tianhong Asset Management, saw the biggest growth among mainland fund houses – has seen substantial demand for its exchange-traded funds, as reported.
*A full feature and more analysis from our annual survey appears in the latest (February) issue of AsianInvestor magazine. Click here for the ranking for numbers 1-25, here for 26-50, here for 51-75 and here for 76-100.
|The top 20 fund houses by AUM growth from Asia Pacific|
|1||Tianhong Asset Management||Asia-based||88.3||10.9||708.88%|
|2||China Southern Asset Management||Asia-based||54.4||36.7||48.07%|
|3||HDFC Mutual Fund||Asia-based||22.1||15.0||47.35%|
|4||Deutsche Asset Management||Global firm||72.3||50.7||42.77%|
|5||Bank of China Investment Management||Asia-based||16.9||12.0||41.35%|
|6||SBI Mutual Fund||Asia-based||15.1||10.9||39.05%|
|7||Principal Global Investors||Global firm||29.0||21.2||36.87%|
|8||SCB Asset Management||Asia-based||30.6||22.4||36.67%|
|9||Lion Global Investors||Asia-based||25.3||18.7||35.15%|
|10||Reliance Mutual Fund||Asia-based||19.9||14.9||33.81%|
|11||Birla Sun Life Mutual Fund||Asia-based||15.0||11.3||32.22%|
|12||Harvest Fund Management||Asia-based||60.7||46.3||30.86%|
|13||China Universal Asset Managemet||Asia-based||16.7||13.1||27.50%|
|14||Macquarie Funds Group||Global firm||95.0||74.6||27.24%|
|15||China Mercharnts Fund||Asia-based||14.2||11.4||25.36%|
|16||RHB Investment Management||Asia-based||14.4||11.5||25.22%|
|17||Allianz Global Investors (include RCM)||Global firm||53.9||43.5||24.00%|
|18||Krung Thai Asset Management||Asia-based||18.4||15.0||22.53%|
|20||Standard Life Investments||Global firm||35.2||28.9||21.71%|