MF global asset base climbs to record USD 74 trn in 2014

The asset base of mutual fund industry worldwide climbed 5 per cent to a record USD 74 trillion in 2014, primarily on account of strong performance of the Asia-Pacific region, led by China and India.
In addition, the industry's profit pool rose 7 per cent to USD 102 billion last year, matching its historic peak reached in 2007 before the financial crisis.
"Managers' asset growth and their record profits continued to be largely the result of rising asset values in global markets rather than new asset flows. Net new flows as a percentage of prior-year assets remained unchanged in 2014," according to a report by consulting firm BCG.

Globally, the industry's profits and assets base have risen to record levels in 2014 but managers "face a future in which growth is not a given and securing future growth will require managers to ramp up their execution and generate more value from their commercial go-to-market capabilities, notably in marketing, sales and pricing."
Further, the asset managers should look for growth potential in the Asia-Pacific region, as per the report titled 'Global Asset Management 2015: Sparking Growth with Go-to-Market according Excellence' noted.
In 2014, Asia-Pacific region fared better than Americas and Europe in terms of growth in profit, assets under management (AUM) and net inflows. Notably, China and India have contributed to the impressive growth in the region.

Fund managers based in Asia-Pacific increased their average AUM slightly faster than those in Americas and Europe. The AUM grew 12 per cent for Asia-Pacific, while the same stood at 10 per cent for Americas and 10 per cent for Europe.

Moreover, growth of the Asia-Pacific region will be driven by wealth and retirement savings.
In the Asia-Pacific, growth of net inflows slowed to 3 per cent in 2014 from 4 per cent in the preceding year -- owing largely to lower risk appetite in Japan and Australia. However, excluding these two markets, flows in the rest of Asia grew at 4 per cent last year.

Besides, net inflows inched up to 1.7 per cent each in Americas and Europe.