The best local fund houses in Asia, explained (part 2)
Every year, AsianInvestor's editorial team conduct an intensive analysis of the region's leading asset management service providers, fund products and asset managers, to ascertain the top organisation of each category over the previous year.
The winners of these categories must combine a mixture of business performance, growth and progress, measured on both quantitative and qualitative criteria.
Below, we detail why we chose the second half of this year's leading fund managers by major Asia market. The standout organisations were selected based upon a combination of their business strengths, asset growth, product and service innovation and support of institutional clients.
Look out for the winners of our asset class awards in the coming days. And please click here to view the explanations for the winners of the first half of our local fund manager awards, and click here to read about the rationales behind this years top Asset Service Providers, please click here.
KOREA
Shinhan Alternative Investment Management
A young, but fast-growing alternative investment manager, Shinhan Alternative Investment Management (Shinhan AIM) has been quickly gaining client attention.
The fund manager posted a 25.7% growth in assets under management year-on-year, to stand at W8.95 billion at the end of 2020. All-told, 99% of this amount was sourced from institutional investors.
The firm is very strong in products development. In 2020, Shinhan AIM introduced US Single-Asset-Single-Borrower collateralised mortgage-backed securities products. It did so by partnering with KKR Real Estate (KKR RESTAC Fund) to create structured investments.
The new products were particularly favoured by local life insurance clients, which committed over $210 million in funds to them during the pandemic. As a result, the fund house looks well set to continue garnering the favour of local asset owners as the world emerges from the pandemic period.
MALAYSIA
Affin Hwang
The Malaysian asset manager demonstrated strong assets under management (AUM) growth in 2020: as of December 31, 2020, this stood at RM72.9 billion ($17.6 billion) – a 26.3% increase from the previous year.
Focused on innovation, Affin Hwang launched 25 new products in 2020, including the Affin Hwang World Series – Global Sustainability Fund, which invests in companies with superior financial and ESG performance, and the Affin Hwang World Series – Global Disruptive Innovation Fund to cater to the rising demand to technology and innovation companies.
Its efforts in engagement and education include workshops about investments and other financial topics; virtual events via webinars and online sharing sessions; weekly commentaries, monthly informational pieces; and bite-sized investment tips via social media.
PHILIPPINES
ATRAM
Asset management companies in Philippines faces a challenging year, as the country was one of the worst hit in the region by the Covid-19 pandemic. ATRAM soldiered on, demonstrating strong performance across the majority of its fund.
Of its Php131.199 billion ($2.73 billion) AUM, the largest share remains institutional business. The firm formally launched its alternatives segment in 2020 to provide additional investment options for its clients.
Underscoring its increased commitment to ESG, the firms last year launched the ATRAM Sustainable Development and Growth Fund, the first fund in the Philippines anchored in the United Nations' SDGs.
Recognising the importance of investor engagement, particularly during the pandemic, ATRAM held a weekly webinar series on Zoom, covering market outlooks, ATRAM products and webcasts with decision makers from companies like Ayala Corporation, the country’s largest and oldest conglomerate.
It has also worked closely with the county’s central bank to tackle financial inclusion.
SINGAPORE
Fullerton Fund Management
Innovation has been at the forefront of the Singaporean fund house’s strategy in 2020. It August it hired Vincent Dumas as its first head of technology and transformation.
It continued to grow its use of artificial intelligence AI in its investment processes to stay ahead of the game. Meanwhile, its assets under management (AUM) grew by 19.6% to $48.47 billion as of December 2020.
At the forefront of investor engagement and education, in 2020 the firm arranged an investment outlook seminar to share insights on investment trends and published over 15 dedicated investment insights on its website. It partnered the Investment Management Institute of Singapore (IMAS) to host a webinar on economic and investment implications of low interest rates and collaborated with the Economist on thought leadership.
It also has an evident commitment to environmental, social and governance principles: it is a UN Principles of Responsible Investing signatory and a founding member of the Singapore Green Finance Centre, launched in September 2020. It also publicly supports the Task force on Climate-related Financial Disclosure and has been active in promoting the importance of sustainability to clients and the wider investment community.
TAIWAN
Yuanta Securities Investment Trust
Yuanta Securities Investment Trust (Yuanta SIT) is the largest fund provider in Taiwan in both mutual funds (including ETF) and beneficiaries owns.
As end of 2020, Yuanta SIT managed $23.7 billion in assets under management (AUM) with more than 1 million beneficiaries, representing a year-on-year growth of 17.4% and 53.3% respectively. This makes Yuanta SIT the largest in both AUM and clients base, taking the market by 14.4% and 31.9% respectively.
The firm has more than 60% contribution from retail investors which benefited from the ride in Taiwan’s equity market in 2020.
Due to the pandemic year, most global expansion and cooperation have been put on hold. Yuanta also shifted its focus to domestic growth by utilizing both internal and external resources.
To capture the domestic market needs, in March 2020, Yuanta launched the first Taiwan equities mutual fund with monthly income distribution and year end capital gain distribution mechanism, Yuanta High Yield Leading Company Fund, raising over $1.6 billion in IPO, marking the highest IPO in Taiwan's mutual fund.
THAILAND
Krung Thai Asset Management
Despite the pandemic, Krung Thai Asset Management demonstrated strong assets under management growth (AUM) in 2020. Its overall AUM grew by 20.31% over the 12 months leading to end of February 2021, to reach $26.6 billion. This continued a strong rate of growth that has averaged at 11.7% per year since 2006.
Of note is the Thai fund house’s experienced leadership: its five senior level management officials have an average experience of 28 years; its fixed income investment team an average experience of 18 years; and its equity investment team an average experience of 15 years. Furthermore, the firm has taken successful steps to increase staff retention. It places emphasis on growing team capabilities in-house through, for example, leadership development and coaching.
Being the asset management arm of a state backed bank, its business has traditionally been skewed towards institutional clients. It has since expanded to cater to the wholesale and retail market but continues to nurture its institutional client base.
In recent years, the firm has made use of artificial intelligence to innovate its investment strategy and has place increasing emphasis on ESG in its investment decisions. In 2019 it launched a local ESG fund (KT-ESG). With a current AUM of $27 million, it is the largest domestic equity ESG fund in Thailand.
Finally, in 2020 the firm used popular Thai message app Line to communicate and engage with customers as the pandemic reduced possibilities for face-to-face interactions. Krung Thai created its own Line mascot sticker set and own Line channel, where customers can search for fund information, including latest NAV. Facebook was also used as a touchpoint to engage with customers.