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Japanese Asset Management Industry - Investment AnalysisPublished by: Frost & Sullivan Published: Oct. 16, 2007 - 43 Pages Table of Contents
AbstractThis Frost & Sullivan research service titled Japanese Asset Management Industry - Investment Analysis provides an analysis of the key investment themes and industry economics of asset management companies, with a focus on investment trusts.This analysis is available through our Financial Benchmarking and Analysis in the Asset Management Industry program. With this program, clients receive industry-leading market research on the asset management industry, along with technical and econometric data and many interactive features including Analyst Inquiry Time, Analyst Briefings, and Client Councils. Market Sectors Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research: Diversification of Distribution Channels Spurs Growth Spurred on by the diversification of distribution channels, the Japanese asset management industry has seen outstanding growth in recent times. While only securities firms were allowed to distribute funds in the past, banks and insurance companies account for about 40 percent of all funds in terms of assets under management as of May 2007 In addition, banks and insurance companies will be able to engage in fully liberalized over-the-counter sales of insurance products by the end of 2007, a key milestone for the Japanese asset management industry. Another remarkable event has been the entrance of the Japan Post to the investment trust market. It is important to note that the Japanese Post, with 24,000 post offices in the country, is the only financial institution with such a broad reach. Additionally, the Japan Post holds about 28 percent of Japan's household savings, which equates to assets of JPY 227 trillion. "The privatization of the postal system, expected to take place in October 2007, will lead to a move of those assets from Government-sponsored and Government-guaranteed savings programs into quasi-private accounts," notes the analyst of this research service. "The likely gradual outflow of funds opens up opportunities for other players and is attracting many asset managers to the world's second largest source of personal financial assets." Publicly Traded Investment Trusts are a Key Growth Driver The growing appetite in Japan for riskier investment vehicles is shown by the growth of investment trusts. Publicly traded investment trusts have been a key driver of growth within the industry, reaching record levels. They amounted to a maximum JPY 78.5 trillion in May 2007, growing from JPY 68.9 trillion at the end of 2006 and JPY 55.3 trillion at the end of 2005. It is also worth noting that retail sales grew by nearly 40 percent in 2006. Distribution has largely been through banks. The Japan Post is also a key distribution channel. In terms of asset class, the Japanese investment trust market has demonstrated a clear shift in the allocation of assets. The market is currently dominated by stock investment trusts, which represented 83.6 percent of the total assets at the end of 2006, followed by bond investment trusts, money management funds and other type of investments (such as alternative investments, mainly real state). "Bond investment trusts and money management funds have declined since 2001 with bond investment trusts decreasing by 13.7 percent compound annual growth rate (CAGR) between 2001 and 2006, and money management funds declining by 19 percent CAGR during the same period," says the analyst. "On the other hand, other investment classes have shown a very positive upward trend, progressing by 67.8 percent CAGR between 2001 and 2006." Get Full Details About This Report >> |
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