NEW YORK, July 16, 2015 /PRNewswire/ -- Investor
attitudes in four key Asian countries have major differences as
well as similarities that should be kept in mind by investment
firms seeking to penetrate these markets, according to a study from
BNY Mellon, a global leader in investment management and investment
services, and Oxford Metrica, an analytics and advisory firm.
These similarities and
differences also apply to distribution channels and other
factors shaping these markets, the study said.
One example highlighting the differences is the preference for
Hong Kong retail investors to
invest with low-cost fund complexes that meet the full range of
their needs, while those in Taiwan
look to specialist managers in various categories.
Among other findings, the study notes the high investment costs
faced by retail investors in South
Korea compared with the low investment costs of South Korean
institutional investors. It also notes the importance placed
on investment performance in Singapore and Taiwan versus the perceived security of
investing through well-known branded firms in Hong Kong.
"Our new study highlights the differences and similarities
between investor attitudes in Singapore, Hong
Kong, Taiwan and
South Korea, as well as
distribution channels and asset classes, which should be a focus
for investment firms seeking to attract clients in these key Asian
markets," according to Daron Pearce,
global investment manager segment head for Investment Services at
BNY Mellon.
Entitled Optimizing Sales in Asia, the study offers current and
prospective players in the Asian cross-border funds market insights
into investor preferences to help inform their marketing and
strategic priorities.
Singapore, Hong Kong, Taiwan and South
Korea are all markets where the European UCITS structure is
widely accepted – and as such represent accessible entry points for
non-Asian investment managers seeking to sell such funds into the
region.
"Sales success in Asia's major
cross-border funds markets requires a deep understanding of the
different factors that inform retail and institutional demand,"
says Pearce. "As one might expect, retail investors are generally
more price sensitive than institutional investors. However the
interplay between price, product range and performance is finely
balanced across all markets analyzed and, as such, close attention
to the realities of individual markets is required by fund
promoters."
The study draws upon a robust quantitative analysis of pricing,
product range and performance in the purchasing decisions of
institutional and retail investors. Data was provided by Lipper, a
Thomson Reuters company. Highlights of the report
include:
- Price sensitivity is not universal. Retail investors in
Singapore, Hong Kong and South
Korea who invest across borders are highly sensitive to
pricing by investment firms. However, this price
sensitivity is not as strong in Taiwan, where the retail market exhibits
higher fund prices, on average, than either Singapore or Hong
Kong. South Korean institutional investors enjoy the lowest
fund prices across the four markets. In addition regulatory changes
in South Korea are designed to
attract inflows of international assets.
- Product range preferences vary from utilizing a one-stop
shop to specialist expertise The study notes the one-stop
shopping solution appeals to Hong
Kong retail investors, who tend to gravitate to firms that
can provide funds suitable through different market cycles. In
contrast, Hong Kong institutions
generally favor expertise from niche providers. Retail investors in
Taiwan and, to a lesser extent,
South Korea, also appear to prefer
funds offered by specialist providers. The study also notes
the retail market in Taiwan offers
greater product diversity than is offered to retail investors in
Hong Kong.
- Performance: beating the benchmarks. For institutional
and retail investors in Singapore
and Taiwan (and, to a lesser
extent, South Korea), there is
some evidence that a fund's relative performance to the index is an
important component of the purchase decision. In Hong Kong, brand security appears to hold
greater weight than outperforming the benchmark over the longer
terms. Cumulative returns over one-year, three-year and five-year
time periods are shown to be a strong driver of sales for retail
investors across all four markets.
In addition to providing detailed quantitative analysis, the
study uses interviews with BNY Mellon clients and insights from BNY
Mellon regional executives to provide supporting qualitative
commentary on market trends and developments to illustrate the
domestic context within which fund purchase decisions are made.
The new study can be found at
https://www.bnymellon.com/us/en/our-thinking/optimizing-sales-in-asia.jsp
For over 100 years, BNY Mellon has maintained a presence in
Asia Pacific, where it was one of
the first U.S. financial institutions to invest in the region's
vast potential. Today, BNY Mellon has more than 12,000 employees in
the region and maintains extensive operations in 16 offices across
12 countries.
BNY Mellon is a global investments company dedicated to helping
its clients manage and service their financial assets throughout
the investment lifecycle. Whether providing financial services for
institutions, corporations or individual investors, BNY Mellon
delivers informed investment management and investment services in
35 countries and more than 100 markets. As of March 31, 2015, BNY Mellon had $28.5 trillion in assets under custody and/or
administration and $1.7 trillion in
assets under management. BNY Mellon can act as a single point of
contact for clients looking to create, trade, hold, manage,
service, distribute or restructure investments. BNY Mellon is the
corporate brand of The Bank of New York Mellon Corporation (NYSE:
BK). Additional information is available on www.bnymellon.com or
follow us on Twitter @BNYMellon.
Contact:
Tim Steele
+44 20 7163 5850
tim.steele@bnymellon.com
Mike Dunn
+1 212 922 7859
mike.g.dunn@bnymellon.com
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SOURCE BNY Mellon