Cerulli Releases Report On Asian Fund Distribution

The Asian retail bank channel, accounts for more than 50% of AUM in most of Asia (ex-Japan) according to the Cerulli Quantitative Update: Asian Distribution Dynamics 2012: Surviving the Distribution Squeeze.

Other highlights: 

• Retail banks are continuing to trim their product suite and list of fund management partners due to higher regulatory scrutiny and rough markets forcing banks to have fewer but stronger relationships with key partners.
• The retail bank channel is fragmenting further, i.e., different banks may have different requirements of managers. Apart from the key selection criteria of investment performance, client service, and stability of investment teams, some banks prefer fund houses that are strong in particular asset classes while others want fund houses that can provide a wide range of products to serve various economic cycles, rather than specific products. This means that no single asset manager can penetrate the entire breadth of the retail bank channel.
• Fragmentation is also showing up in the way of some retail banks approving products for distribution. Previously, the local branches of global banks chose products from a regional or global approved list. However, some global banks are now giving their local offices more autonomy to decide which products work best.

Mutual fund assets under management (AUM) in Asia ex-Japan is expected to reach US$1 trillion by end-2012 and US$1.5 trillion in 2016, according to another report by Cerulli.