APAC Emerging As Significant Engine of Global Fund Sales01.17.2019
APAC Distribution 360, a new study by Broadridge Financial Solutions, Inc. (NYSE:BR), a global fintech leader, examines the opportunities and challenges for asset managers developing distribution strategies in this rapidly evolving region where assets under management have reached $3.8trillion.
Compiled by Broadridge’s growing Global Market Intelligence business, the report offers in-depth coverage of 11 of the most significant fund markets in the region. The study highlights the most promising access routes and the hurdles to overcome in the different jurisdictions.
Key findings include:
APAC an engine for global fund sales – The region accounts for 10% of global fund assets under management (AUM) ranking it behind the US and Europe for volume, but it has generated over 25% net fund flows over the past 10 years, and AUM has more than doubled since 2012 with a five-year CAGR of 14%.
Picking the right entry strategy is crucial – Passporting Ucits funds into select jurisdictions has proven lucrative for some global asset managers. Other fund managers must choose between joint ventures, partnerships, sub-advisory or a local physical presence.
Local regulators are flexing their muscles – Local regulators are bringing about a variety of changes in APAC’s markets, including encouraging onshore over offshore distribution in Taiwan, to overseeing the introduction of lower-fee funds in Japan.
Indonesia: an untapped market – Of over 250 million inhabitants, fewer than 1 million currently use mutual funds. A huge growth market for global investment managers, but one presently with limited entry points without a local presence.
The report is authored by Yoon Ng, Director, APAC Insights, Broadridge and Mark McFee, Director, EMEA Insights, Broadridge and was compiled using qualitative and quantitative data from Broadridge’s extensive suite of mutual fund databases.
“While APAC has long been a growth market for global fund sales, a highly varied distribution landscape has posed challenges for large asset managers and many are increasingly looking to markets such as China and South East Asia as the number of middle class and HNW investors continue to climb,” commented Yoon Ng, Director, APAC Insights, Broadridge. “We have launched our inaugural report on fund distribution trends in the region to deliver fresh insight across 11 markets specifically for these institutions.”
“A tougher market for fund sales and scrutiny on investment fees in developed markets such as Europe has seen many large providers look east for future growth opportunities,” said Mark McFee, Director, EMEA Insights, Broadridge. “For asset managers reviewing the accessibility of Asia-Pacific’s dynamic fund markets, the best starting point is to consider their firm’s investment capabilities and operational set-up in the context of each market’s asset base, viewed through multiple lenses.”
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