Assets under management jumped 42% in 2009 to $145.2bn, shaking off the impact of the financial crisis and surpassing the previous peak of $133.5bn set in 2007, according to the Cerulli report. Between 2005 and 2009 fund assets rose nearly 82%, a compound annual rate of 16%.
To compile the figures Cerulli analyses the Malaysian, Thai, Indonesian, Philippine and Vietnamese markets in separate country chapters as well as Singapore as part of a regional chapter.
However, while net inflows were positive in 2009, they still disappointed compared to 2007 due to continued caution from investors and a tightening of regulations in the region, says Cerulli.
“Improved regional stock market performance and recovering investment appetite, on balance, should boost regional flows in 2010—although clearly the impact of the sovereign debt crisis on markets poses some risk to this central scenario,” said Ken Yap, Asia-Pacific director at Cerulli.
“However, looking out longer term, we expect Southeast Asian mutual fund assets to more than double to $307.1bn by 2014, at a similar CAGR of 16.2%,” said Yap.
Malaysia accounted for the largest chunk of the asset growth in 2009, with some $60.1bn, or 41%, followed by Thailand, Singapore, Indonesia, the Philippines and Vietnam.
Cerulli says Malaysia also offers the best expansion opportunities for global managers, due to a comparatively well-developed regulatory structure, a fondness for saving, government backing for the development of the mutual fund sector and high profit margins.
“Expansion into Southeast Asia is best suited to global managers with an existing Asian footprint, whereas those new to Asia are better off focusing on North Asia initially, since its asset size dwarfs Southeast Asia,” said Sunil Jagtiani, associate director at Cerulli.
“Those firms in a position to tackle Southeast Asia have to approach it with the right expectations and right strategy,” added Yap. “Wholesaling, for instance, will not work for the mass retail sector, whereas white labelling will, but only for certain markets.”