Since the consumption story in Asia is a long-term and sustainable one, I believe these two funds will remain popular among our clients and prospects.
In the interim, India performs slightly better than the region. The country’s post-cabinet expansion in November (last year) will improve the bandwidth of Modi’s team. Falling inflation and favourable monetary policy will also provide India with a growth tailwind.
Against such a macro backdrop, we have an increasing number of clients enquiring about our India Sector Leader Equity Fund, which aims to capture the wide-ranging investment opportunities presented by Indian companies with leading positions in their respective industries/products/services.
How are you generating new marketing opportunities this year?
In terms of distribution channels, 70% of our mutual fund business is from wholesale distribution, we are finding the institutional mix is increasing. In this regard, we are enhancing our infrastructure to better serve institutional clients.
We are hiring a sales representative in Sydney, Australia, who will be responsible for the distribution of our SICAV funds in the country.
We are also seeing more oppor-tunities emerging in the Middle East. For instance, we are now have separately managed accounts for a number of key institutions, including a recently launched Asia sharia-compliant equity product for a Middle Eastern client.
In Europe, we have been expanding beyond our distribution in the UK. For example, Scandinavian financial institutions are keen to receive information about our SICAV products. Also, we have seen significant take up of our funds in German-speaking Europe.
Are you targeting new markets?
In terms of geographical outreach, our new markets would be Australia and to some extent the Middle East.
In terms of distribution, since we have been working very closely with wealth managers, we are also exploring our collaboration with family offices around the world.
Our sales team has been working very hard to get in touch with our prospective family office clients.
We have recently hired a head of consultant relationships who is based in Hong Kong to foster our relationship with investment consultants. In addition, our head of sales in Australia will be on board by the end of September. With all necessary measures being put in place, I believe we will be able to expand our institutional business globally.
How do you expect international fund flows to go during the rest of the year?
After the sharp correction of global equities in August, investors became more risk-off. However, when facing a low interest rate and low-growth environment, investors have to continue to invest to preserve capital and accumulate wealth.
Hence, we have seen that investment sentiment has been picking up since the beginning of September.
In fact, there are investors saying that as valuations of US equities reach a peak, and after the correction in Asian markets, Asian equities are more reasonably priced than before the correction.
A positive feedback with Chinese corporates is that wage growth is still robust at 7-8%, which gives us comfort in our positioning in consumption-related themes such as tourism, internet, insurance and healthcare.
Gross margin expansion due to commodity price correction is visible in consumer companies across the region. However, demand recovery has been limited to niche categories and alternate distribution channels such as e-commerce.
We envisage that capital will gradually flow back to Asian equities for the rest of the year.
Ashley Dale is chief marketing officer of Mirae Asset Global Investments (HK). In this role, he oversees the distribution and business development activities in Asia Pacific, Europe and the Middle East for Mirae Asset’s cross-border mutual fund products. He also works with the Exchange Traded Funds Division. He joined Mirae Asset Securities in 2009 as head of equity UK sales, having previously worked in senior roles at Morgan Dale Capital, GLS Capital, Bear Stearns (UK) and SG Securities (UK).
