China is Asia's worst-hit market for funds

ChinaAssets under management in China's long-term mutual funds declined nearly 15% in 2011 as modest net inflows failed to offset a big decline in asset values caused by selloffs in the equity and bond markets, according to a report by Cerulli Associates.

China was the worst-performing fund market in Asia in terms of the loss in AuM, exceeding Japan's loss of nearly 14%, though in the case of Japan the decline was due almost solely to net outflows not market performance.

The funds industries in Singapore and Taiwan also saw a decline in AuM driven by falling asset values of roughly 11.5% each, while Hong Kong funds suffered a decline of nearly 12%. However, Hong Kong funds had inflows of nearly 9%, which offset most of the loss.

The only Asian market to achieve both net inflows and positive market performance during 2011 was Indonesia. The Jakarta Composite Index was left relatively unscathed by the volatility seen last year, said Cerulli, “due partly to sound monetary and fiscal policies that have eased inflationary pressures and kept interest rates low”.

Total AuM in the Asia funds industry declined roughly 10% to $1.9 trillion (€1.4 trillion) during 2011, according to Cerulli.

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