Assets under management (AUM) may climb higher in emerging Asian economies this year on the back of improved sentiment and low penetration, analysts said.
The region has a large and growing middle class with a low penetration of managed products, 5 percent of total financial assets on average, compared with 15 percent in Western countries, Fitch Ratings said.
Emerging markets, including China, Malaysia and Thailand, could see faster growth than mature markets such as Singapore, Taiwan and South Korea, the international ratings agency forecast.
However, China has suffered from its equity focus in a five-year bear market and an underdeveloped debt market until recently. The stabilizing equity markets and recent regulatory initiatives to expand capital markets would allow China to close the gap in the next few years, Fitch said.
Fubon Asset Management Co (富邦投信) aims to be overweight in China now that political uncertainty has settled, senior portfolio manager Kevin Hsu (許興豪) said.
Vice president of the local fund house Mark Wang (王世芳) said that equities may recover some of their popularity with investors amid the improving global economy.
While East Asia represents a growth opportunity for international asset managers, distribution in the region is not straightforward, Fitch said.
The cross-border wealth management and institutional segments are highly competitive, while in retail, large consumer banks dominate distribution in most countries — making distribution agreements critical, Fitch said.