Nearly US$74 billion was deposited into 1,377 newly launched funds across Asia, Europe, and Cross-Border markets during Q3’16. Product development was overwhelmingly concentrated in Asia where 890 new funds attracted US$53 billion in net new cash. Newly launched funds in local Europe attracted US$11.1 billion, about 61% less than the previous quarter and US$5.4 billion less than the US$16.5 billion accrued during the same time a year ago.
New long-term product sales in Asia totalled US$53 billion in Q3, bringing total new fund flows year-to-date through September 2016 to US$129 billion. China continued to dominate the contributions with US$42 billion this quarter, and Japan added US$4 billion, while Taiwan, Thailand, India and Korea all gathered over US$1 billion each. Bond products attracted the most new money at US$22 billion. Mixed funds followed closely with US$19 billion, already exceeding their 1H’16 total of US$15 billion. Equity and guaranteed funds collected US$7 billion and US$3 billion in net new money, respectively, also ‘other’ products (mostly alternative investment funds) together with real estate vehicles garnered more than US$1 billion for the quarter.
BOC Yue Xiang Interval Bond Fund was the top selling fund this quarter, gathering US$4.2 billion in net new flows. The fund invests at least 80% of its assets in bonds. After the IPO, the fund is scheduled to be open for subscriptions and redemptions in a three month interval, which will allow better liquidity management and relatively long-term investment strategies. This could lead to more stable and potentially higher returns for investors. Another example is BOC Seasonal Return 3-Month Interval Bond Fund, which collected US$0.8 billion in net new money during its IPO in July.
Approximately US$9.6 billion was garnered across 217 new long-term funds launched in the Cross-border space, during Q3. Bond and ‘other’ funds collected the most investor money with a combined $6.8 billion in net new flows, followed by mixed-asset and equity funds, which attracted $1.6 billion and $1.2 billion, respectively.
New fund launches in local European markets gathered US$11.1 billion in Q3, which was only 40% of what was gained in the second quarter this year, and a US$5.7 billion decrease from the Q3’15 result. Italy was the best-selling market with US$4 billion, mainly from ‘other’ and mixed products, which garnered US$2.7 billion and US$687 million, respectively. The U.K., after raising inflows of US$7.6 billion in the prior quarter, attracted US$2.2 billion in net new cash in Q3, a decrease of over US$5 billion.