In May 2016, long-term funds in Asia (excluding existing funds in China, which report data on a quarterly basis) garnered US$21 billion in net flows. Bond funds led with US$10 billion, followed by equity, mixed and real estate products collecting approximately US$3 billion each, while guaranteed programs and ‘other’ funds added US$1.7 billion and US$0.7 billion in net new money, respectively.
Bond Asia Pacific and Equity Asia Pacific were the top two selling categories, raising a respective US$9 billion and US$3 billion in net flows during May. In contrast, Bond Emerging Markets experienced close to US$0.6 billion in net redemptions for the month.
The Chinese stock market’s low performance in May pushed investors towards bond funds as they sought more stable investment platforms. The newly launched Chinese fund ICBCCS TaiXiang 3 Years Financial Bond Fund took the lead this month, attracting a large net inflow of almost US$5 billion. This cash management product has a closed contract that can be renewed each three years, and uses the corresponding 3-year bank deposit rate as its benchmark. Japan’s Fidelity US REIT Fund that benchmarks against the FTSE NAREIT also absorbed 0.9 billion during the month.
Further details can be found in our 60-page quantitative summary of the region.