The top Asian local fund houses in 2021, explained (part 1)
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 organisation of each category over the previous year.
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 leading fund managers by major Asia market. The standout organisations were selected based upon a combination of their business strengths, asset growth, product and service innovation and support of institutional clients.
Look out for the second half of the local fund manager award explanations on Friday (June 11). And to read about the rationales behind this years top Asset Service Providers, please click here.
Harvest Fund Management
Established in 1999, Harvest Fund Management (Harvest) boasted over 100 million retail investors and 7,000 institutional investors at the end of 2020.
The fund house had Rmb1.3 trillion ($203.25 billion) total assets of under management at the end of last year, and it offered its investors an overall return of Rmb81.3 billion, 45% higher than the previous year. In addition, the return for close to 50 of its fund products exceed 50%, while another 23 provided over 70%. That was a spectacular result; over the same period the Shanghai Composite Index rose by 13.87%.
Products-wise, Harvest launched over 30 new mutual fund products in 2020, ranging from fixed income funds, equity funds, hybrid funds, ETF, etc.
The fund house has been one of the first Chinese managers to enter the European and American markets, serving global clients including sovereign funds, central banks, pension funds, insurances and other large institutions. In 2020, it continued to expand its global presence. That led its global assets under management to total over $13 billion, an increase of 18.5% year-on-year.
It has also raised its ESG engagement, officially releasing a self-developed ESG scoring data system in June 2020 onto global financial data platforms. In addition, its research and investment team conducted over 900 on-site visits at various potential investment targets.
Bosera Asset Management (International)
Now 11 years old, Bosera Asset Management (International) has continued to thrive, despite the tricky conditions of 2020. During the year its assets under management jumped by 31.8%, partly as a result of the strong support of its institutional investor base.
The flagship Bosera Asian Bond Fund, which had been first launched in February, 2013, has been a particular winner. As of December 2020, it provided its original investors with a cumulative yield of 64.04% under the US dollar share class, meaning an annualised investment return of 6.41%. For its renminbi share class, the fund has provided a cumulative yield of 69.37%, equivalent to an annualized return of 6.84%.
Bosera International’s equity products have also continued to achieve long-term stable growth, which has earned the support of institutional clients around the globe. For example, the firm manages an active China-A equity value strategy portfolio for an Asia national pension fund.
That faith was well rewarded last year; In 2020, the fund beat the benchmark by around 13.3% to offer a total return of 51.14%. That ran well ahead of many global benchmarks, such as the MSCI China A onshore net return.
JP Morgan Asset Management
US fund house JP Morgan Asset Management continues its impressive track record as a strong asset manager in Hong Kong.
It offered 70 authorised funds in the territory in 2020, of which more than half were ranked at 4- or 5-stars by funds data provider Morningstar. In addition, 39 of the products outperformed peers and achieved first- or second-quartile ranking based on three-year performance.
In terms of asset under management, JP Morgan AM enjoyed nearly 20% growth, year-on-year, in Hong Kong. Its flagship tech-themed funds outperformed peers in 2020 by delivering a return of over 80% during the year.
The firm also has a strong local presence: in Asia Pacific, it has more than 1,400 employees, while in Hong Kong it boasts a team of over 540 professionals that has remained stable over the past three years.
According to Z-Ben Advisors’ 2021 China Rankings report, JP Morgan AM also ranked the first among all asset managers and stood as the first in its outbound asset manager category.
SBI Funds Management
SBI Fund Management’s success is down in large part to its experienced investment team. It possesses 58 professionals with an average of 15 years’ experience in Indian capital markets and six years at the firm.
All-told, its portfolio Managers possess an average experience of over 20 years covering the Indian markets. Nineteen members of investment team are Chartered Financial Analyst (CFA) qualified.
In 2020, the firm demonstrated continued growth in its institutional client segment. It was also the worlds’ largest Indian ETF provider in 2020. As of 31 December 2020, its assets under management (AUM) stood at $168.54 billion.
SBI was also ahead of many of its peers in recognising the importance of environmental, social and governance (ESG) factors, being the first fund house in India to offer a dedicated ESG fund. It is also a signatory of the UN Principles of Responsible Investing; the first mutual fund house in India to adopt the Stewardship Code; and a participant in the Climate Action 100+ initiative.
Today, its ESG is 10-members strong, including 2 fully dedicated ESG analysts. SBI recently expanded ESG lens to fixed income as well as equities. Finally, SBI is the first asset management company in India to be compliant with the Global Investment Performance Standards.
The alternatives asset manager has demonstrated consistently strong performance relative to peers: it zero-loss track record to date, unusual for emerging market managers, especially in Indonesia. Including co-investments, its private credit strategy yielded exceptional rates of return.
Indies Capital’s assets under management (AUM) have grown at double digits each year since its inception in 2009, including during last year. As of the fourth quarter of the year, AUM stood at $675 million. This can be attributed to new capital raises as well as a rise in the net asset value of its portfolio. A large proportion of its AUM are attributable to institutional clients.
Indies Capital boosts a small but capable team with an average experience of 24 years and an average tenure within the firm of 5.1 years. It is also one of the few Indonesia-focused investment managers with colleagues on the ground in Jakarta.
To engage with its investors, Indies organises twice-yearly events to present the market, strategy and portfolio in depth and to address questions. It also partners with distribution platforms to run closed-door seminars. Finally, Indies boasted a set of strong testimonials from clients and partners with which it worked in 2020.
Asset Management One
It may be the leading asset manager in Japan, but Asset Management One still found room to grow last year. Its assets under management (AUM) in 2020 registered a 7% increase over the previous year, reaching $526 billion. It sources 81% of this amount from institutional investors, with the remaining 19% coming from retail investors.
The awareness of environmental, social and governance (ESG) has been rising in Japan in recent years, and to cater to this the firm has actively developed a global ESG- focused strategy. As a result, its AUM in ESG- focused mutual funds such as the Global ESG High-Quality Growth Equity Fund for retail investors has continued to expand. The fund only launched in July 2020 in collaboration with a global asset management manager, but it quickly grew to boast an impressive AUM of approximately $10 billion at the end of February, 2021.
The impact of the Covid-19 pandemic served to underline AMO’s vigorous efforts in ESG engagement. During the past fiscal year, it engaged with investee companies across active and passive equity strategies, as well as fixed income funds. Its total number of engagement interactions with companies stood at close to 1,900.
In particular, AMO conducted over 1,500 equity engagements with 590 companies, representing approximately 80% of the Topix benchmark index market capitalisation.