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Palo Alto, CA, United States, 2007/10/23 - New research from Frost & Sullivan, Japanese Asset Management Industry – Investment Analysis, finds that the Japanese Investment Trust sector expects to exhibit a healthy growth of 26%, in terms of assets under management, during the period 2006-2011.
The Japanese appetite for other investment vehicles continues to grow with the historical low returns from bank or cash accounts, the rising cost of living and longer life expectancy. Consequently, many new participants have begun entering the Japanese market in order to capitalize on the burgeoning opportunities. Additionally, the increasing absolute amount of "investable" assets enhances the attractiveness of the Japanese asset management sector.
New research from Frost & Sullivan (financialservices.frost.com), Japanese Asset Management Industry – Investment Analysis, finds that the Japanese Investment Trust sector expects to exhibit a healthy growth of 26 percent, in terms of assets under management, during the period 2006-2011.
If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants an overview of the latest analysis of the Japanese Asset Management Industry – Investment Analysis, then send an email to Sara Villarruel - Corporate Communications at sara.villarruel[.]frost.com with the following information: your full name, company name, title, telephone number, email address, city, state, and country. We will send you the information via email upon receipt of the above information.
"The Japanese have traditionally invested the majority of their financial assets in bank deposits, however with their bank accounts drawing virtually zero percent interest, they are increasingly looking to 'riskier' investments," notes Frost & Sullivan Consultant María Cañamero. "This is leading to a significant number of new entrants, new products, and creativity in the marketplace, thereby expanding opportunities."
Interestingly, Japan is the only developed economy in the world that holds the majority of its financial assets in cash and deposits (50.5 percent as compared to 13.6 percent in the United States at the end of December 2006). This situation has started to show signs of change and if this shift continues to follow the same pattern of the United States or major European countries, an important reallocation of assets will likely occur in the coming years. Given the country's enormous asset base, this changing trend promises to further bolster the growth of the Japanese asset management industry.
However, a lack of financial education and investment methods remain a key challenge for the industry in Japan, especially when households move from savings towards "riskier" investments. A historically conservative and risk aversion approach to investing in Japan further compounds this challenge.
"Many Japanese do not have an adequate understanding of their financial needs or financial products and services," says Cañamero. "This lack of financial education may be a major challenge for financial institutions if they want to attract investors for sophisticated investment vehicles."
In order to overcome this challenge, financial institutions need to make it easier for individuals to make investment decisions by promoting education as well as enhancing the disclosure of financial information and corporate governance. Moreover, the current increase in volatility in global equity and fixed income markets adds an unanticipated cause for concern as these trends look to take hold in Japan.
Japanese Asset Management Industry – Investment Analysis is part of the Financial Benchmarking and Analysis in the Asset Management Industry program, which also includes research in the Indian asset management industry. The research provides an analysis of the key investment themes and industry economics of asset management companies, with a focus on investment trusts. Interviews with the press are available.
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