Asia’s asset management industry should overcome market uncertainties this year following “robust growth” in 2021 despite the coronavirus pandemic, according to a new report.
Cerulli Associates said in its latest report on the Asia-Pacific region that assets under management (AUM) in Asia increased by 15.9% in the first three quarters of last year, up from 11% in the same period in 2020.
Asset growth was led by China, with 20.2%, followed by Singapore with 19.5% and India with 16%.
The rise in assets came amid a growing popularity of environmental, social and governance (ESG) funds, which gained traction across the region alongside an increased focus on net-zero emissions commitments and decarbonisation.
“Investors are likely to stay conservative in 2022 amid prevailing market uncertainties,” said Ken Yap, managing director for Asia at Cerulli Associates.
“However, the development of emerging themes, including ESG and passive investing, and continued regulatory support across various markets indicate a positive outlook for Asia’s mutual fund industry.”
Economic Transition
China’s asset management industry is expected to continue registering sound growth in the long run, driven by the nation’s economic transition to high-end and green manufacturing.
The country also boasts an increasingly diversified product and distribution landscape, and further foreign capital relaxation on business ownership.
Yap said Singapore’s de facto central bank, the Monetary Authority of Singapore, is stepping up efforts to channel capital to environmentally friendly projects, while enhancing fund domicile opportunities.
In India, product innovation is expected to continue in global investments and sustainable themes, offering global managers product partnership opportunities with local fund houses.
Superannuation funds in Australia are also pushing for stronger ESG practices, while managers in Malaysia have been integrating both ESG and Shariah principles into single funds.
“Regulators and associations are also making more concrete efforts to introduce standardised disclosures, especially in the areas of climate change and carbon transition,” Yap noted.
He said China retirees have become a lucrative market, “especially with a new pension system providing tax incentives for eligible mutual funds and bank-issued wealth management products in the pipeline”.
- George Russell
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