Top Asian local fund houses in 2021, explained (part 1)

We explain the rationale behind the judges' choices for top local fund houses of AsianInvestor's Asset Management Awards 2022.
Top Asian local fund houses in 2021, explained (part 1)

Since its launch a decade ago, the AsianInvestor Asset Management Awards have become an industry leader, sought after by the largest asset managers with a presence in Asia Pacific.

The awards have evolved through the years. While they used to be selected solely by the editorial team, we now tap the knowledge and expertise of a judging panel comprising independent industry veterans and top executives from asset owners across the region to bring greater weight to our awards procedure.

We have also developed more specific criteria with a points system to guide entries and allow for a more structured and transparent process. 

Today we reveal the rationale behind the judges' selection of winners for the Top Local Fund Houses for mainland China, mainland China (offshore), Hong Kong, India and Indonesia, which we had announced in April.

The criteria for this category included business growth in 2021 particularly with institutional clients; sophistication evolution such as new markets, products or mandates; and key innovations in areas such as services and technology. As with all our awards, client testimonials and case studies were given some weight in the decision process as well. 

Tomorrow, we reveal the second half of the local fund manager award explanations. Congratulations again to all winners.

Invesco Great Wall Fund Management Company Limited

Invesco Great Wall is fast becoming a fixed income king in China. Already well recognised for it in a competitive market, IGW went on to consolidate this position in 2021.

Overall, the picture has never looked better for the fund, with operating income and net profits hitting record highs in 2021.

Total operating income for the year was CNY4.5 billion ($670 million), a year-on-year increase of 70%. The net profit was CNY1.4 billion, a year-on-year increase of 71%.

The overall performance of IGW’s equity investment was stable, with excellent medium and long-term performance. Total sales of IGW in 2021 were CNY3.40 trillion, and the net sales were CNY203.8 billion.

Among these, sales of balanced products with bias towards equities registered CNY331.8 billion, with net sales of CNY92.8 billion. Sales of fixed income products, meanwhile were CNY129.6 billion, with net sales of 85 billion.

In terms of its retail business, the issuance of new funds achieved remarkable results in 2021, further deepening its strategic partnership with two banks in China, one of which had a new fund sell out in one day to reach a cap of CNY8 billion.

In 2021, the scale of IGW's new funds raised in the two banks reached CNY24.5 billion and CNY15.1 billion respectively.

At present, the holdings of the two banks' agency sales are around CNY34 billion.

In terms of institutional business, banks are the firm’s key strategic clients, with the sale of non-monetary products exceeding CNY100 billion and net sales exceeding CNY50 billion. The top three bank clients contributed net sales of CNY12 billion, CNY6.5 billion and CNY5.5 billion respectively.

IGW, meanwhile, has actively explored new business cooperation with the banks’ wealth management subsidiaries. 

CSOP Asset Management Limited

A clutch of great new products and a steadily growing client base continues to position CSOP Asset Management as China’s most successful offshore fund.

Established in Hong Kong in January 2008 as the first offshore subsidiary established by one of the largest Chinese asset management companies, CSOP is a leading ETF issuer in Asia.

Judges awarded CSOP not only the Top Fund House in China (offshore) but it has also been awarded Asia’s Fund House of the Year due to its penetration of fresh geographies.

With sizeable inflows from both institutional and retail investors in different markets, giving it a diversified investor structure, CSOP’s flagship products performed strongly throughout 2021.

Thanks to the cross-listing of its Hang Seng TECH Index ETF in June 2021, AUM was boosted to more than HK$13.6 billion AUM as at the end of December 2021. The investment from onshore China accounted for more than 26% of this.

CSOP also relaunched the CSOP Bloomberg China Treasury and Policy Bank Bond Index ETF in Hong Kong by engaging ICBC as the investment advisory. The relaunch attracted more than $725 million fund flows including investment from sovereign wealth funds and multi long-only institutional investors.

It also ranked among the top inflows of 2021 among all ETFs listed in Hong Kong.

As the largest Singapore domiciled ETF and the largest pure Chinese government bond ETF in 2020, CYC/CYB attracted investment from sovereign wealth funds and regional institutions, with AUM growing to $1.45 billion as at the end of December 2021.

In terms of client base, this increased significantly thanks to the geographic expansion in terms of both products and business development activities.

According to Central Clearing & Settlement Systems, there are more than 500 institutions participating in CSOP’s products in Hong Kong alone, representing millions of investors.

Thanks to the new ETF launched in Singapore, the number of institutional investors from Southeast Asia grew significantly. Moreover, the investor base also expanded considerably in Korea, Taiwan, and Thailand as evidenced by marketing and sales efforts in those regions.

In 2021, CSOP introduced 10 ground-breaking products, further enriching its product offerings. These included future-themed ETFs that covered green energy, smart driving, biotech, cloud computing among others. 

JP Morgan Asset Management

With a submission that impressed judges and delivered “impressive achievements across many areas”, JP Morgan Asset Management leveraged its leading position in 2021 to achieve significant growth.

Stepping up its service for Chinese institutions and high-net-worth individuals on outbound investments from Hong Kong, its active participation in cross-border programmes between Hong Kong and China is charting a path for other funds to follow.

Achieving over 80% market share by net flows in the Northbound Mutual Recognition of Funds (MRF) programme since its inception, it reported positive inflows in 2021 while the industry saw slight net outflows.

It is now strategically positioned for the new Greater Bay Wealth Connect Scheme, with more Hong Kong Unit Trusts ready to be sold to Chinese investors than any of its rivals.

In terms of sustainable investments, the June 2021 acquisition of Campbell Global, a leading player in forest management and timberland investing, made JPMAM a significant player in this renewable resource, aligning with its ESG mindset as a global asset manager.

There were plenty of opportunities, too, for institutional investors.

In June it also launched JP Morgan Private Capital, which includes a new growth equity investment arm and an existing private debt business, committed to providing customised solutions for early and growth stage companies across the capital structure.

The fund also expanded its private credit platform with Global Performing Credit, broadening its ability to offer direct equity and debt investment capabilities to clients and corporations.

As far as appointments were concerned, JPMAM bucked the trend by placing key people in Hong Kong. James Peagam, the fund’s Global Head of Insurance Solutions, relocated to the city permanently.

The move has highlighted the firm’s focus in the region and its commitment to strengthening its advisory and analytics offerings to insurance clients (particularly on asset-liability, capital, regulatory, tax, and accounting considerations). 

SBI Funds Management Ltd

Staggering growth at this Indian fund made it the stand-out submission for Fund House of the Year – India.

With few companies in South Asia to rival its revenues or profits, SBIFM grew its operations by 25.72% and profits grew at 29.81% for the full year 2021. 

Supported by an experienced investment team, extensive distribution network and risk management aligned to international standards, SBIFM has truly differentiated itself in its institutional coverage in the Indian mutual fund space.

It added 19,975 institutional clients in 2021 – an astonishing growth of 96.3% compared with 2020 – giving it the largest institutional mandates in the Indian asset management space.

Under its Portfolio Management Service (PMS), SBIFM grew by 25.72% to $127.75 billion with a net addition of 5 new large institutional clients.

SBIFM is by far the largest asset manager in India with over $US213 billion as of December 31, 2021 compared with $US168 billion as of December 31, 2020 across mutual funds, PMS and alternative investment funds (AIF).

SBIFM continues to be the market leader in asset mobilisation, client addition, and process enhancements.

In the domestic mutual fund space, it outperformed the overall industry and grew at 37.47% in 2021 at a time when the overall industry growth was at 28.58%.

In the domestic mutual fund space, SBIFM had 40,716 clients in 2021 compared with 20,741 clients in 2020, again a staggering growth of 96.3%.

Manulife Aset Manajemen Indonesia

This fund returned big numbers. MAMI delivered outstanding growth in 2021, beating estimates quarter after quarter throughout the year.

Deftly navigating a tough investment landscape required strong risk management and the application of prudent principles to deliver these remarkable returns.

A big push in terms of institutional investors – which currently make up 68% of the company’s assets under management (AUM) – saw the fund add 31 new institutional clients in 2021.

Throughout the year, MAMI’s total number of investors more than doubled, from over 655,000 retail and institutional investors to more than 1.5 million investors.

In just 12 months, the company's mutual fund AUM grew by 27.3%, from IDR49.4 trillion ($US3.5 billion) to IDR 62.9 trillion ($US4.4 billion), far exceeding the industry growth of 1.1% in the same period.

MAMI recorded the highest AUM growth rate in the Indonesian mutual fund industry. The company's market share increased rapidly, from 8.6% at the end of 2020 to 10.8% at the end of 2021.

The outstanding growth in the mutual fund’s AUM has contributed positively to MAMI’s total AUM. The company’s total AUM increased by 17%, from IDR 97.2 trillion ($US6.8 billion) to IDR113.4 trillion ($7.9 billion) at end of 2021, cementing its position as the leading investment management company in Indonesia among its 92 other rivals.

With this favourable balance of asset stickiness and profitability – and an impressive distribution network -  MAMI is well positioned to maintain a sustainable investment franchise in Indonesia.

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