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VISTA overtaking BRICs for trust investments

5, 14. 2007

   Vietnam, the Philippines, Australia and South Africa are emerging as trust investment targets following Brazil, Russia, India and China (BRICs). There is a tendency of overheated competition toward these new investment targets, and trust investment managers, and other such financial institutions which sell trust funds as securities houses and banks are looking at them as new investing areas to follow BRICs .

Popular among baby boomers now 50 years to 60 years old

Attention focused on investments in Indonesia
Attention focused on investments in Indonesia

   Focusing its attention on Vietnam, the Philippines and other emerging investment trust targets, Okasan Securities Co., Ltd. has increased to 31 the number of its investment trust products related to Asia. The number had been only 8 until April 2007. An official at the securities house said putting money into the investment trust targeted at Asia is “like a boom”. “It’s popular particularly among the baby boomers now 50 years to 60 years old,” he said. “The products sell well,” he added, however, “But they are products of the future. At present, the products selling well are those related to the countries in the Pacific Rim, covering Oceania.”

   According to the “Foreign Currency Denominated Assets Publicly offered Investment Trusts of Contractual Type by Each County” announced by The Investment Trust Association, Japan, the assets of the BRICs countries as of the end of March 2007 were 106,100 million yen for Brazil, 2,100 million yen for Russia, 374,900 million yen for India and 120,600 million yen for China. Among the countries and regions with large amounts of assets in Asia and Oceania were Australia which was at the top of the list with 3,220,500 million yen, followed in order by Hong Kong with 1,216,500 million yen, New Zealand with 578,200 million yen, Singapore with 287,100 million yen and Taiwan 215,100 million yen.

   Among other countries in Asia, the Philippines registered the assets of 12,700 million yen, Malaysia, 63,000 million yen, Thailand, 39,900 million yen and Indonesia, 30,800 million yen, while Vietnam’s figure was not available at the end of March. “These figures,” said the association source, “are on an upward trend.”

Five new investment trust targeted at emerging countries to be opened between end-April and end-May

   JPMorgan Asset offered a new product, “VISTA5 Fund”, at the end of March. VISTA stands for Vietnam, Indonesia, South Africa, Turkey and Argentina. The asses in balance held South Africa already reached 86,300 million yen, while those of Turkey totalled 33,400 million yen. Argentina’s 2,300 million yen alone exceeded Russia, which is one of the BRICs countries.

   The Nihon Keizai Shimbun on its April 20, 2007 issue carried a story under the headline to the effect that “trust investments toward emerging countries expanding”. The story went on to say that there were increasing offers of investment trusts that that included investments in Philippine and Vietnamese equities. Such domestic Japanese companies as DLIBJ Asset Management Co. and Nomura Asset Management Co. have joined foreign-invested asset management companies, and they are said to be ready to introduce five investment trust products between the end of April and the end of May.

   Amid an increasing number of individual investors who are turning their attention to investing overseas because they think it is no longer profitable to invest in Japanese equities, there is likely to be heated competition in the sales of the investment trusts.

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