The strongest growth rates are expected to come from net new assets in China and India, with China forecast to have double the assets of Japan.
In addition, ETF growth in the region is expected to outpace mutual fund asset growth, but still remain relatively small, the report noted.
“A pervasive and persistent low interest rate environment and the search for yield in APAC is making assets more addressable to asset managers,” said Yoon Ng, Broadridge’s director for Asia global market intelligence, in the report. “This trend is expected to continue.”
In terms of asset classes, money market funds dominated flows during the five-year period ending June 2017 in the region. Although this is skewed by the massive inflows into China’s RMB 5trn ($790bn) money market fund industry, these products are also popular in Korea, India and Thailand, the report noted.
Fixed income funds saw huge inflows in 2016, after initial concerns that central banks would raise interest rates faster than expected began to fade.
For multi-asset funds, after a spike in mid-2015, fund flows remained steady. Nevertheless, Ng expects positive flows into these funds to continue amid broader economic uncertainties. In addition, asset managers continue to launch “more innovative” mixed asset funds in the market.
“However, asset managers have to keep multi-asset funds simple and transparent enough for Asian individuals to understand how they work. Greater traction is likely to be achieved as Asians improve their financial literacy,” Ng said.
