The top market fund houses 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 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 top fund managers by market, encompassing Korea, Malaysia, Philippines, Singapore, Taiwan, Thailand and Vietnam.
KOREA
Shinhan BNP Paribas Asset Management
For the second year in a row, Shinhan BNP Paribas Asset Management has won the Korea Fund House of the Year award. In large part it has done so because of its influence with institutional investors; many of the good and the great among Korea’s asset owners allocate some funds to the fund manager.
Indeed, it sourced close to 80% of its W57.8 trillion ($49.97 billion) in assets under management from institutional investors at the end of last year, and it was able to boast business from the likes of the National Pension Service, the Government Employees Pension Service and Korea Teachers Pension.
It also had over W16 trillion AUM from Korean insurance companies, which included heavy hitters Samsung Life Insurance, Hanwha Life Insurance and Shinhan Life Insurance.
In 2019, Shinhan BNP Paribas Asset Management built a cooperative system with companies which invested in new and renewable energy, as part of a rising focus on sustainability. The asset manager also increased its environmental, social and governance (ESG) investments including eco-friendly infrastructure, job creation as well as small and medium enterprise financing.
In addition, Shinhan BNP Paribas Asset Management upgraded its ESG scoring system, which helped it source more institutional capital to its ESG-related fund, Shinhan BNPP Tops Beautiful SRI Fund.
MALAYSIA
Affin Hwang Asset Management
Affin Hwang Asset Management enjoyed a robust 2019, during which it was able to point to some good asset growth. By end-January 2020, the fund manager had expanded its assets under administration by nearly 18% to RM57.8 billion ($13.52 billion) from RM49.1 billion a year before.
A large share of this AUM growth was sourced from increased mandates that Affin Hwang operated on behalf of Malaysian pension funds and insurance companies.
The fund manager has also joined in on the rising focus of investors on environmental, social and governance (ESG) criteria in its investment approach. The fund manager says it does so, particularly when it comes to the governance aspect, because these data points can demonstrate well run companies that are likely to enjoy better financial performance than their rivals – and lead to better investment returns.
As part of this increased focus on governance, the fund house has been making investments in green bonds for its fixed income portfolios. When it comes to the ‘S’ part of ESG, Affin Hwang has focused on its ethical and shariah bond mandates, catering to this rising part of Malaysia’s investment community. In addition, the asset manager is looking beyond its own resources to improve its capabilities and has implemented third-party providers for ESG and governance research.
PHILIPPINES
ATR Asset Management
2019 was a challenging year for the Philippines, not least for local investment funds. Despite this ATR Asset Management funds managed to outperform its respective benchmarks and beat many of its peers. Some of its funds led the rankings for domestic fund houses, while others landed safely in the top quartile for annual performance.
That helped ATR Asset Management managed to build upon an already good 2018, in which it had broken the PHP100 billion threshold to end up with assets under management of PHP107.2 billion ($2.04 billion). Last year it expanded this further by a whopping 29% to end December 2019 with AUM of PHP138.3 billion.
That was mostly sourced through institutional investors too. At the end of last year, about 82% of ATR Asset Management's AUM was sourced from institutional investors, with wholesale having developed into 16% and retail investors comprising only 1%.
A part of the fund house’s impressive growth rate could be traced to the fact it was approved to serve as an administrator for the Personal Equity Retirement Account (PERA), the tax-advantaged voluntary pension scheme of the Philippines. PERA had struggled to gain traction after it was officially launched in 2016, so ATR Asset Management has been using its online platform, Seedbox, to bring manual processes online and boost its PERA-related AUM.
The fund manager has fed into more technology elsewhere too. Last year it created a database for its internal scores for the environmental, social and governance (ESG) criteria of local equity investments, which made it a first mover when it came to promoting ESG factors in domestic investments.
SINGAPORE
JP Morgan Asset Management
JP Morgan Asset Management has been named the best fund house in Singapore once again for its ability to maintain its strong brand position in the market and cater to the needs of investors.
The fund house targets a wide range of clients including retail, sovereign and corporate clients in Singapore and the assets under management serviced by JP Morgan AM Singapore enjoyed a very healthy double-digit growth during 2019.
This was on the back of some strong product performances. In August 2019, the US fund house’s Asean Equity Fund was awarded the Gold Analyst Rating by Morningstar, the highest-ranking award in Morningstar. It is also a leader in the Asean equity space, as it is among the few asset managers that offer both regional and single-country Asean funds that are managed in Singapore.
JP Morgan AM has a 67-strong team on the ground serving clients in Singapore and across Southeast Asia, which help it to manage a large amount of assets from the broader Southeast Asia region.
In countries such as Thailand, Malaysia, Philippines and India, it works with locally licensed asset managers and insurance companies to offer its flagship global strategies via locally registered feeder funds. In 2019, five additional funds were launched via the feeder fund route, two each in Malaysia and Thailand and on in the Philippines.
AsianInvestor also recognises JP Morgan AM’s commitment to educate investors with market insights and thought leadership papers so that investors can make more informed investment decisions. The fund house also launched marketing campaigns during the year in view of the escalating geopolitical tensions so that retail investors could better navigate the changing market environment.
TAIWAN
Capital Investment Trust Corporation
Capital Investment Trust Corporation (CIT) is an independent fund house that does not enjoy the abundant resources that its bigger peers, particularly the ones that belong to large financial holding companies. Yet despite this, it has been able to offer diversified products that delivers excellent fund performance to investors.
The assets under management (AUM) of CIT had an amazing growth in 2019. As of the end of 2019, CIT's AUM reached NT$373.08 billion ($12.44 billion), more than double of the NT$157.23 billion in end-2018 and a historical record for CIT.
The increased amount mostly came from the growth of overseas bond exchange-traded funds, domestic money market funds, overseas fund of funds and overseas investment grade bond funds.
CIT’s bond ETF had the biggest contribution to the AUM growth in 2019, which increased by NT$132.79 billion. The product offers many appealing characteristics to investors, such as trading flexibility, portfolio transparency, diversification, lower trading cost and regular payment. That combination of factors helped to attract strong inflow from institutional investors, mainly insurers, in a low interest rate environment.
In addition, CIT owned 13 products lines, including 63 mutual funds and ETFs as of December 2019, satisfying the different risk preference of investors.
CIT is also among the three fund house picked by Taiwan’s Financial Supervisory Commission to join a two-year trial universal retirement plan launched last year, as it possesses consulting experience on Private School Faculties Service Pension Fund and solid investment experience in both domestic and overseas markets. And the fund manager’s capital retirement umbrella fund, a target risk fund in Taiwan, could offer an important example of pension reform for the fast-aging island.
THAILAND
UOB Asset Management
UOB Asset Management (Thailand) provides full range of investment services for private funds, provident funds, and mutual funds in the country, and it has been making innovative efforts to market its products.
At the end of January 2020, UOB AM (Thailand) recorded assets under management (AUM) of THB269 billion ($8.4 billion), representing a 28% year-on-year growth, versus only 8% in the industry grew during the same period. In 2019, it launched new 14 funds which brought in THB6 billion. This AUM growth was driven from the several key institutional mandates, showcasing its solid investment philosophy and fund management capabilities.
In collaboration with the Stock Exchange of Thailand (SET), UOB AM (Thailand) is now preparing to be the first asset management company that can offer the funds through 'Clearstream' distribution online platform this year, so that its funds become more visible to foreign investors around the world.
Amid a volatile market in 2019, UOB AM deemed it essential to invest across various asset classes to generate positive return and keep drawdowns at reasonable level. It then launched its United Harmony Fund Series to counter market volatility. The core portfolio has three multi-asset solutions, which offer diversified portfolios for investors with different risk profiles to capture investment opportunities globally for long-term returns.
What’s particularly special about the fund is its three sub-funds. UOB AM (Thailand) said they are analogous to jazz, pop and rock, with each genre representing a distinctive risk profile. The fund manager believed comparing the approaches to different styles of music would make them more relatable for retail investors.
VIETNAM
Eastspring Investments
Eastspring Vietnam is the largest fund manager in the country in terms of assets under management (AUM), with over VND102 trillion ($4.4 billion) at the end of last year. Over the past year, the AUM growth was a staggering 35.3%. Most of the growth is came from its affiliate Prudential Vietnam.
Eastspring has been active in developing Vietnam’s capital market. As well as being an executive member of the Vietnam Bond Market Association, the fund manager continues to work closely with the regulator to introduce 15, 20 and 30-year bonds to the market, for which it is the first buyer on behalf of its clients. Subsequently, this also makes the asset manager on of the biggest traders of government bonds in the Vietnamese market.
Eastspring also partnered with the Training Center of State Securities Commission to produce a series of articles aimed at equipping investors with a stronger knowledge of mutual funds. This covered asset classes including fixed income and equity as well as balanced and mixed asset funds. The asset manager also educated them about the benefits of mutual funds and how to invest in them.