In April I participated in a panel discussion at a conference on current trends in the Asian fund management industry. During the discussion the audience was asked whether the global financial crisis had affected both investor attitudes and fund manager relationships with their distributing partners. All but 10 per cent believed this was the case.
Most noticeably, investors had lost confidence in equities through the crisis resulting in strong flows to bond funds and flows generally out of mutual funds. This trend has continued at different times since, particularly when Asian and global equity markets have been stressed.
The most recent data published by Z-Ben Advisors in China confirm this pattern of investor behaviour, with strong flows into money market funds at the end of last year, and flows out of mutual funds as a whole during the first quarter of this year. The latest report shows the industry lost more than 9 per cent of its assets as the Chinese stock market lost more than 6 per cent in the first three months of this year.