Broadridge: Brand is Driver of Chinese Retail Fund Demand
For asset managers seeking to capture a share of China’s $9.4 trillion mutual fund market, they best reallocate resources away from enhancing investment capabilities or building new strategies and focus on marketing.
UBS Asset Management, J.P. Morgan Asset Management and BlackRock led the pack in a survey conducted by global fintech firm Broadridge which asked 1,500 retail investors in China to rank 60 global asset managers.
«Chinese investors today do not directly associate foreign managers with their investment capabilities or strategies,» said Yoon Ng, director of Asia Pacific insights at Broadridge in a «SCMP» report. «Rather, some of them have been able to leverage on their parent group branding and distribution networks and do well in the country.»
Seven of the top 10 ranked asset managers were backed by banking or insurance groups with the three exceptions being BlackRock (third), Invesco (fourth) and Schroders (seventh).
Onshore: A Different World
Domestically, investors took a different view on foreign asset managers placing emphasis on their commitment to China based on signs like licenses acquired or the entity structure, be it wholly-owned or joint venture businesses.
Even for local players, respondents placed Tianhong Asset Management at the top spot due primarily to its sheer size, most notably from assets acquired through its money market fund Yu’E Bao.
«With the tightening of rules in recent years that restrict banks from offering implicit guarantees in their investment products, and the clamping down on shadow banking practices associated with wealth management products that banks distribute, we believe that growth drivers for asset management will be ETFs and mutual funds,» said Ng, estimating that the market would group from $4.8 trillion today to $9.4 trillion by 2023.
