TOKYO, April 4 A global bond fund of Japan's
Kokusai Asset Management, which has reigned as the top mutual
fund in the country for more than 12 years, was knocked from the
position by Fidelity's U.S. high-yield fund as investors become
more enthusiastic about chasing higher returns.
Kokusai's flagship bond mutual fund, called Global Sovereign
Open, was once a symbol for cash-rich Japanese households'
appetite for foreign assets, but it has suffered consistent
outflows since the financial crisis triggered by the failure of
Lehman Brothers in 2008.
Japanese investors could be more eager about taking risks in
as sentiment towards domestic shares improved following Prime
Minister Shinzo Abe's aggressive reflationary and monetary
measures, fund analysts said.
As of Thursday, the asset value of Kokusai's Global
Sovereign fund was 1.195 trillion yen ($11.50 billion), only
about a fifth of a peak of 5.7 trillion yen in 2008.
The Global Sovereign fund, which has been the top fund since
January 2002, is an actively managed mutual fund that invests in
global government and agency bonds with high credit ratings of
higher than a single A-minus rating.
Fidelity's U.S. High Yield Fund has been drawing huge
inflows over the past year, with the asset value reaching 1.212
trillion yen ($11.67 billion).
Tokyo-based Shinko Asset Management's U.S. REIT Open fund,
managed by U.S.-based Invesco, was also quickly catching
up, with its asset size rising to 1.161 trillion yen.
The Japanese mutual fund market grew by a record amount in
2013 as strong global equity prices and a weaker yen spurred
healthy inflows in domestic and U.S. funds.
Domestic retail investors remain keen about taking exposure
to Japanese stocks and U.S. assets this year due to prospects of
bright economic prospects in the United States, analysts said.
Still, outflows from Global Sovereign accelerated since the
start of the year after the fund lowered its monthly dividend
payments to investors, said Shoko Shinoda, a fund analyst at
Rakuten Securities Economic Research Institute.
"Low yield condition in developed countries in recent years
was a key factor to hurt demand for the Global Sovereign fund,"
"It suffered a serious blow after it reduced monthly
dividends in January," she said.
($1 = 103.8900 Japanese Yen)
(Reporting by Chikafumi Hodo; Editing by Kim Coghill)