Foreign business takes up the slack at Tokyo asset managers


Almost twenty per cent of assets in discretionary accounts with Tokyo’s fund management firms at the 31 March year-end were from foreign clients – the first time since 2007 they have closed on such a level and only the third time since 1994 when the country’s modern asset management industry came into being. Text continues below table

The numbers come from the latest report of the Japan Investment Advisors’ Association and are based on figures submitted to it by its members.

The 30.7% increase in gaijin treasure, to 48.9 trillion yen, seen in the final quarter of 2017/18 brought the rise year-on-year to a remarkable 59.3%.

And a Good Thing too since domestically sourced assets under management rose just 8.2% year-on-year and fell by 3.1% in January to March. Japanese corporate and government-run pension funds saw the biggest falls — of 3.9% and 3.4% respectively — which pushed the total down below the record 200tr yen level recorded for the first time at the end of the 2017 calendar year.

While coincidence is not causality, the shift in the customer base has coincided with a fall in the percentage of portfolios invested in Japanese stocks to 26.9% (from 28.8% three months prior and 27.5% a year ago) and a rise in that in Japanese bonds to 23.0% (from 20.1% and 22.5% three and twelve months before).

Total mandates in issue were up 98 to 7,463. Of these 1,127 came were from foreign customers — up by 120 from the start of the financial year with 79 won in the last quarter.

The number of corporate pensions mandates fell by 16 in January to March but, at 4,282, were still 80 up year-on-year.

Mandates to manage government-run retirement schemes reached record 553 — more than double the March 2015 level. It remains …continue reading