Published by Asia Asset Management – 16th Aug 2018
The Asian onshore fund market recorded sharply lower net sales in the second quarter of 2018 driven by outflows from active funds, while overall assets declined, according to US fund service provider Broadridge Financial Solutions (Broadridge).
Most Asian stock markets were hit in recent months by escalating global trade tensions. The benchmark MSCI Asia All Country ex Japan Index lost about 6% through the second quarter.
Net sales of Asian onshore funds shrank to US$8.5 billion in the three months to June 30 from $45.6 billion in the first quarter – a decline of $37.1 billion – Broadridge says in a quarterly report on August 15.
A net outflow of $11.4 billion from active funds during the period “weighed heavily” on overall net sales, while 63% of all onshore funds saw outflows exceed inflows, according to the report.
As a result, the assets of Asian onshore funds fell 4.1% quarter-on-quarter to around $2.2 trillion at the end of June.
“Overall, the top-selling sectors were dominated by equities funds while the bottom-selling sectors were dominated by bond funds,” Broadridge says. “Net inflows to country-specific equities or bond sectors tended to come from within the country itself.”
For example, it notes that all purchases of bond funds denominated in Korean won came from within South Korea.
But China equities funds were an exception as they drew net inflows from Hong Kong, Japan and Taiwan.
Japan was Asia’s top fund market in the second quarter with net sales of $6.7 billion, but that was sharply down from $47.8 billion in the prior three-month period.
China fared better, reversing from a $33 billion outflow in the first quarter to a $2.4 billion inflow in the three months to June 30.
According to the report, five of the six top-selling funds during the quarter were exchange-traded funds (ETFs), including Yuanta/P-shares Taiwan 50 ETF, Bosera Gold ETF, and Nikko Listed Index Fund TOPIX.
It says the most popular sectors for Asian fund launches over the 12 months to June 30 were multi-asset allocation, onshore RMB-denominated bonds, mixed dynamic, consumer equites, and global currency bonds.
