During 4Q’16, over 1,400 long-term funds were launched across Asia, Europe and Cross-Border markets, gathering US$85.7 billion in net flows, 15% higher than that of the previous quarter. This increase was mainly driven by product development in Asia, where more than US$60 billion were deposited into 874 new funds.
China remained the top-selling market in 4Q’16, collecting US$53.2 billion in net flows mostly from bond funds. Those Bond CNY programs, usually structured as “new” or “innovative” closed-end funds as well as interval closed-end funds, often have a shorter IPO period, a small number of investors and a closed period of one to three years. Many of those funds are designed to serve institutional investors including banks, insurance companies and trust companies.
AM-ONE World Mid and Small Cap Equity Fund, an Equity Global product sub-advised by Mizuho-DL Financial Technology, topped Japan’s bestselling new fund list in 4Q with US$543 million in new fund sales. Nomura US Value Strategy Fund, sub-advised by U.S. manager American Century, followed closely with US$491 million in net subscriptions during the quarter.
Excluding Japan and China, Asian markets collected the most new investor money through newly launched bond and guaranteed funds this quarter. Bond Asia Pacific LC collected US$404 million in new fund money in 4Q, 45% of which went to Taiwan-domiciled Fidelity Asian Total Return Bond.
In the Cross-border space, Target Maturity Bond was the best-selling new fund category of the quarter, collecting $1.9 billion or 15% of total new fund flows in 4Q. AllianceBernstein Fund-Fixed Maturity Bond 2020 and HSBC GIF Global Corporate Fixed Term Bond 2020, topped the bestseller list, each attracting over US$0.6 billion in net flows since inception. Both funds are designed to cater to the needs of Asian clients, particularly in Singapore, through private bank channels.
Locally domiciled Target Maturity Bond funds garnered US$1.1 billion in new fund sales in local Europe during 4Q, over 80% of which originated from Italy and Spain. Eurizon Obbligazionario Mlt Credit Dicembre 2021 enjoyed US$432 million of new investor money, while US$278 million was accrued by BBVA Rendimiento Espana, FI, which has a target maturity period of eight years as the strategy expires in 2024.
ESG funds seemed to remain attractive to investors in Local Europe during 4Q, collecting a total of US$661 million in net deposits. Two-thirds of that total was contributed by BNPP Sustainable Bond Euro Short-term and ACTIAM Responsible Index Fund Equity Emerging Markets, which are domiciled in France and the Netherlands, respectively.