Fidelity $2.4 billion fund vaults past JPMorgan in race for SE Asia cash

Sun Sep 9, 2012 11:03pm EDT
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By Nishant Kumar and Charmian Kok

(Reuters) - Money manager Fidelity saw a surge of cash into a Southeast Asian equities mutual fund this summer, helping it leap past $2 billion in size and overtake a long-time leading rival product from J.P. Morgan (JPM.N: Quote).

Fidelity's ASEAN fund has attracted estimated net inflows of $460 million in the last three months alone to become, for the first time in more than six years, the largest fund focusing on the region, data from Thomson Reuters Lipper showed.

The inflows underscore the popularity of Southeast Asia at a time when key emerging market economies are seeing outflows. The region of 600 million people has a combined economy of $2 trillion that is boosted by domestic consumption, public spending and a growing middle class.

It also shows that Southeast Asian investors are getting choosier, and gravitating towards better-performing funds.

"It's been a good story to market," Medha Samant, a Hong Kong-based investment director at Fidelity Worldwide Investment, said in a telephone interview.

"Clients are increasingly feeling that ASEAN markets are in a much stronger position to weather a global economic downturn compared to 10 years ago," she said.

Assets of Southeast Asia-focused funds tracked by Lipper stood at $7.8 billion at the end of July, the highest since December 2007. Other offshore funds investing into individual countries in the region managed a further $16 billion.

More than 50 mutual funds focus on Southeast Asia stock investments, nearly double from five years ago, and the inflows for Fidelity and some others such as Japan's Daiwa will help draw investor attention to the region as other Asian countries such as China and India slow. The inflows could ultimately help deepen the region's relatively illiquid markets.   Continued...