Drops seen in deposits across the board - New Funds in Global Markets - 2Q 2017 - Asia, Local Europe, and Cross-Border

Across Asia, Europe and Cross-border markets, about US$58 billion was deposited into 1,277 newly launched long-term funds. Net subscriptions into new Asian products dropped nearly 60% since 1Q’17. Across European and Cross-border markets, net sales also decelerated, but to a much smaller extent than in Asia. Combined, local Europe and international funds attracted US$33 billion in net new flows, which represents 57% of the total new cash garnered across the three regions.

New long-term funds launched in Asia within the second quarter of 2017 barely attracted US$25 billion in net subscriptions, a massive reduction compared to the US$60.3 billion raised during the preceding quarter. Yet, the number of newly launched products in the region only decreased by close to 30%.

China maintained its position as the best-selling market in 2Q’17, though only collecting US$13.6 billion in net new flows, a 67% drop compared to 1Q’17. Investors overwhelmingly shied away from new bond funds, which only recorded US$7.3 in net flows, a fourth of the previous quarter’s result. Similarly, new investor money deposited into mixed products significantly dropped, reaching a third of the 1Q figure. Meanwhile equity vehicles slightly gained popularity.

In Japan, the abundance of Artificial Intelligence-themed funds, as well as the replication of some of these Big Data offerings in the U.S. stocks sphere, placed Equity Sector and Equity North America funds at the forefront of investors’ demand. Combined, the two categories accounted for over 60% of total long-term product sales in Japan in 2Q’17.

Nearly a third of the total net flows recorded by new Cross-border funds in 2Q’17 were deposited into mixed products, which gathered close to US$4 billion. Net subscriptions into equity funds more than doubled compared to the prior quarter, reaching US$3.4 billion. On the other hand, net deposits into bond vehicles dropped about 62% and garnered US$3.8 billion. Similarly, ‘other’ products gathered less than a third of their 1Q’17 net inflows.

In local Europe, 2Q’17 newly launched long-term funds attracted US$21 billion in net subscriptions, spread across 341 new products. For the first time since 1Q’16, mixed products (US$8.9 billion) outsold their bond peers ($3.8 billion), while equity products gathered US$6.7 billion in new cash. Italy was again at the heart of new product development in Europe this quarter, as the market’s 68 new funds amassed US$7.7 billion in new investor money.