The ability of foreign asset managers to take 100% foreign ownership of China-based subsidiaries and expand has not gone smoothly.
It may be too soon to assess the likely effect of the Wuhan coronavirus outbreak, but investors are taking risk off the table in the short term while they hope for a swift recovery.
Online sales of funds in China are disrupting the dominance of commercial bank distribution but the latest tie-up between two giant firms has limited scope, say some analysts.
A lack of scale in Singapore and the problems of trying to sell funds with no distribution costs or adviser commissions are seen as key reasons for Vanguard closing the office.
Passive fund houses are likely to wait for direct access to China’s mutual fund market, but this entails risks, says a report to be released today by Standard Chartered and Z-Ben Advisors.
With actively managed funds falling woefully short of their targets, passive products have the chance to finally overcome the reticence of Asian investors. Regulatory changes could help.