The future of asset management in Asia: Spotlight on Taiwan and Japan
In Asia’s highly competitive asset management landscape, Taiwan and Japan are looking to stake their claim as regional hubs, to lure overseas capital by leveraging advantages that range from demographic trends, to government and regulatory support, to growing retail investor appetite.
The asset management sectors in both markets show an encouraging growth trajectory. In Taiwan, for example, total assets under management (AUM) at the end of last year were NT$8.41 trillion ($253 billion), nearly 25% higher than six months earlier, on the back of demand for exchange traded funds (ETFs) among retail buyers.1 Combined with a relatively open regulatory environment and solid economic fundamentals, Taiwan has become an increasingly attractive market for foreign asset managers.
In Japan, meanwhile, asset management AUM was just over ¥635 trillion ($4.2 trillion) as of March 2024, a 17% increase compared with the previous year.2 This partly reflects the pressures in the country from an ageing population, which needs to adopt more diverse investment strategies rather than continue to allocate so much to cash savings and conservative investments. Further, government policies like the Nippon Individual Savings Account (NISA) aim to shift household savings into investments.
“Taiwan and Japan are fast becoming emerging asset management centres in Asia,” said Chan.
It also bodes well for these aspiring asset management hubs that they share some of the attributes of the US industry that helped it to flourish – a tighter regulatory framework which spurred transparency and investor protection, the rise of mutual funds and diverse products to make investment more accessible to retail investors, and technological advancement, including computerised trading and data analysis.
Taiwan: taking asset management to the next level
Strong regulatory support is a key driver behind Taiwan seeking to raise the asset management bar. Notably, with its “Asia Asset Management Center” project, the Financial Supervisory Commission (FSC) is aiming to attract overseas capital and talent to Taiwan by promoting localised zones through policy incentives and regulatory easing.3
“There is a lot of top-down commitment from the government and regulators,” added Chan.
Taiwan already has an enviable pool of retail investors as a foundational building block. The growth in the local ETF market reflects this, with Taiwan being the third-largest in Asia with a 10% share of the region’s ETF market as of June 2024.4 Further, Taiwan remains the standout bond ETF market in the Asia Pacific, with Taiwan’s AUM of NT$79.2 billion in bond ETFs ranking it first in Asia and the fifth largest globally. (Read more about the regional ETF boom in Asia)
Collaboration with exchanges in Taiwan also bodes well for the broader local asset management vision. This includes an agreement between ICE and the Taipei Exchange (TPEx) to co-brand indices, providing investors with a broader range of high-quality investment opportunities. This collaboration has led to TPEx getting approval to launch the first multi-asset ETF in Taiwan, the KGI US Top Balanced ETF Fund which tracks the performance of NYSE TPEx 70-30 Equity Top 10 N-Listed & Treasury 3-10 Year Balanced Index.
“As Taiwan evolves to become a key asset management centre in Asia, our work with leading exchanges, such as the TPEx, allows us to apply our global expertise, legacy of innovation and robust data capabilities to launch new products that benefit investors,” explained Chan.
Japan's rising prominence in asset management
Japanese investors are playing an important part in the country’s objective to transform and elevate its asset management industry.
Demographics are a key driver. With an ageing population, institutional investors are seeking higher yields through alternative investments and private markets assets to preserve financial wellbeing and meet the pension shortfalls forecasted in the years to come. At the same time, a significant proportion of the trillions of US dollars (equivalent) in household savings, is held in cash or deposits.
Notably, Japan is already the leading ETF market in Asia Pacific, with a 37% share of regional AUM.5 And as of the end of 2024, the total net assets of ETFs in the country were just under ¥90 trillion, up from ¥75 trillion the previous year.6
Japan’s government has recognised the significance of promoting more retail-led investment, expanding NISA – a tax-exempt investment scheme for individuals – to allow investment trusts to include unlisted shares in NISA portfolios.
These dynamics are enticing for global asset managers, as are other trends. Interest rates have finally started to rise, while the government has been implementing initiatives to attract foreign asset management firms. Further, a single NAV process has been implemented to reduce duplication and costs for foreign firms.
Ultimately, several barriers that have existed historically – such as language, cost to hire talent and duplicated processes – are being removed. This is leading to lower costs and greater efficiencies, such as removing the need for multiple sets of technology and data.
Individual paths to success
Taiwan and Japan’s initiatives mirror how other international asset management centres have developed their local industries over time.
As the largest asset management market let’s take the US as a global benchmark. The asset management industry in the US grew from financial innovation, adopting new technologies as they emerged, and using more data analytics, to help shape investment strategies. Further, the US embraced globalisation, enabling fund houses to manage assets across borders, leading to the introduction of new products, including ETFs and index funds.
In addition, the regulatory framework is coordinated and transparent, prioritising investor protection with the introduction of the US Investment Company Act of 1940, which laid the foundation for the modern US asset management industry.
With the development of the US asset management industry in mind, Taiwan and Japan are taking similar steps forward. Through regulation and government-led policies, they are creating the frameworks and fostering the investor confidence that underpinned US growth. Other concepts that benefited the US, such as the evolution towards fee-based portfolio management, may come over time.
Data: a key source of growth
In parallel with the various tailwinds for asset management in Taiwan and Japan, global industry trends show an increasing demand for data and analytics to support growth, said Chan.
This is clear from research by BNY of over 200 leading asset managers and asset owners. This survey, for example, found that reliance on data and analytics will be the focal point in asset management over the next three to five years.7 This is especially the case in Asia Pacific, with 40% of respondents in the region placing a higher importance on transparency to stakeholders as a top three consideration over the coming year – versus 32% in North America, and 31% in EMEA.
Chan pointed to another key finding in the report that around 80% of asset owners globally agreed their biggest barrier to effective data management was the ability to obtain real‑time, high‑quality data. ICE provides comprehensive, timely market data across fixed income pricing, reference data, analytics and derivatives, to help clients develop investment strategies and manage risk. As the industry navigates trends such as the move to electronic trading, the integration of AI, and the expansion of private wealth, ICE’s depth of data and expertise means the company works closely with clients to solve complex problems and continually expand its datasets.
In tackling data issues, accessing outside support to integrate data sources and improving transparency is a key objective for some industry players, added BNY’s report, including exploring partnerships from co-creating new products to increasing reliance on existing financial service providers.
The situation in Taiwan and Japan is no different. “To support these markets in becoming asset management hubs in Asia, they will need more data and technology to enable industry players to enhance decision-making, gain market efficiencies, manage risk and meet regulatory compliance,” said Chan.
Sources
1 - Source: American Chamber of Commerce in Taiwan, “Can Taiwan be an Asian Asset Management Hub?” March 17, 2025. https://topics.amcham.com.tw/2025/03/can-taiwan-be-an-asian-asset-management-hub/
2 - Source: Statista Research Department, June 19, 2024. https://www.statista.com/statistics/1215214/japan-aum-of-investment-management-companies/
3 - Source: Financial Supervisory Commission, December 6, 2024. https://www.fsc.gov.tw/en/home.jsp?id=54&parentpath=0&mcustomize=multimessage_view.jsp&dataserno=202412120001&dtable=News
4 - Source: “The emerging Asia ETF Asset Management Center”, SITCA, August 2024. https://www.sitca.org.tw/ROC/SITCA_ETF/files/ETF_AMC_english.pdf
5 - Source: “The emerging Asia ETF Asset Management Center”, SITCA, August 2024. https://www.sitca.org.tw/ROC/SITCA_ETF/files/ETF_AMC_english.pdf
6 - Source: Statista Research Department, January 17, 2025. https://www.statista.com/statistics/1219541/japan-net-assets-of-etfs/
7 - Source: BNY’s “The Future of Asset Management: A Trends Report”. https://www.bny.com/corporate/global/en/insights/future-of-asset-management-trends-report.html