The research, which was co-sponsored by Mirae Asset Global Investments Group and Citi, concluded that growth in investment assets in the region will be boosted by an expanding middle class, new “pools” of insurance money and retirement assets, and increased interest from foreign investors.
Other key findings of the report, entitled ‘Picking high-hanging fruit: Competition intensifies between Asian managers and foreign firms’, include:
- Mini-QFII (qualified foreign institutional investor) could transform the power and influence of Chinese domestic asset managers. As the RMB becomes a more widely accessible and tradable currency, this will feed through into product demand, with investors increasingly seeking exposure not just to Chinese assets, but also to the currency itself.
- ETFs (exchange traded funds) do not yet account for significant assets under management in Asia compared to mutual funds, but they are beginning to capture the popular imagination. At the same time, since the Chinese offshore mutual fund market is likely to be the main engine of the region’s growth, mutual funds will still be key to retail growth.
- Institutional clients are increasing in sophistication, but this is not at all good for external managers. In contrast to the opening up of insurers, more and more pension and sovereign funds will start to look like Singapore’s Temasek and GIC, or institutions that don’t generally need outside help.
- There are certainly examples of investment platforms and independent financial advisors gaining traction in Asia, but compared to the power of the banks as distributors, it’s not yet significant.
- Competition between Asian and Western managers will play out globally, not just locally. Western players will have their commitment to Asia tested, particularly if they are unable to provide the right vehicles and strategies.
