RP mutual fund industry lags behind rest of Asia — AIM study

The country’s mutual fund industry continues to lag behind its counterparts in the Asian Region, a study commissioned by the Asian Institute of Management (AIM) showed.

In end 2003, Philippine mutual funds were managing assets worth $792 million as against $8 billion in Indonesia, which is ranked among the smallest in the Asia-Pacific region.

The People’s Republic of China recorded assets under management (AUMs) of $20 billion in end-2003, even as China’s mutual fund industry was only six years old.

In contrast, the Philippines started its mutual fund industry way back in the 1950s although it was only in the early 1990s when it was able to get off the ground.

Thailand’s mutual fund industry managed assets worth $11 billion while Malaysia handled assets worth $18 billion in 2003.

In the same period, Taiwan managed funds worth $76 billion, Hong Kong and Korea, over $250 billion each; and Japan, $349 billion.

Based on the AIM study, the Philippine mutual fund industry was finally marching forward in 1994 with AUMs worth $30 million but Thailand was handling $8 billion, Malaysia with $12 billion, Taiwan with $3 billion, and India with $18 billion.

In terms of the number of funds managed and made available to the investing public, the Philippines also lagged behind its Asian neighbors.

By the end of 2003, the country’s mutual fund industry managed 21 funds. China, on the other hand, had 110 funds, Indonesia with 186, Malaysia with 217, Thailand with 333, and Taiwan with 401.

The region’s biggest players had more than 9,000 funds combined in end-2003. Hong Kong had 963, Japan with 2,617 and Korea with 6,736.

A similar study also commissioned by AIM revealed that the Philippine mutual fund industry’s contribution to the savings rate as a percentage of gross domestic product (GDP) was 15 percent.

But the same study showed that on the same category, Malaysia’s mutual fund indsutry contributed 31 percent, Thailand 37 percent, Indonesia 38 percent, India 24 percent, China 36 percent, and Taiwan 27 percent.

Currently, the AUMs handled by the Philippine mutual funds as of end-March this year is now roughly $1 billion.