Asian fund assets reach $652 billion

Assets in Asian mutual funds—excluding Japan—hit a high of $652 billion in 2006, according to a report from Boston-based Cerulli Associates. That’s a 30% year-over-year increase. Strong regional stock market performance last year attracted investment dollars into mutual funds and other wealth management products,noted the report, entitled “Asian Distribution Dynamics 2007.” At $255 billion, Korea boasted the largest number of assets under management in the region, but China had the strongest growth rate at more than 80%, with 855 billion Renminbi ($109.4 billion) in assets last year. Mutual fund assets in China hit RMB 1.8 trillion as of June 2007, thanks to strong demand for equity funds during the first half of the year. Regulatory reforms also helped bump mutual fund penetration to 6% in the region, excluding India and Hong Kong. “Regulators here are keen to deepen their financial markets by opening the doors, albeit tentatively, to foreign investing and foreign fund managers,” said Shiv Taneja, Cerulli’s managing director, in a statement. “This gives Asian investors greater incentives to consider professional asset management as an alternative to direct investments in the local stock market.