August 13, 2014 / 8:27 AM / 3 years ago

Japan investment trust funds at record high spurred by Abenomics

TOKYO, Aug 13 (Reuters) - Japanese investors held a record amount of funds in investment trusts, or toushin, that invest in risk assets such as stocks and foreign bonds, as retail investors warmed to economic steps dubbed “Abenomics”, an industry group said on Wednesday.

Assets held by publicly-offered Japanese “stock investment trusts”, hit a record high 70.1 trillion yen ($684.8 billion) at the end of July, up from 68.8 trillion yen in June, the Investment Trusts Association data showed.

Investment trusts are one of the main vehicles through which Japanese investors own risk assets, ranging from Japanese stocks to Brazilian real bonds and funds of funds.

In addition, assets under privately-offered stock toushin, which are held more by institutional investors, also reached a record 41.2 trillion yen at the end of July, it added.

“Funds have steadily flown into investment trusts, but the impact of Abenomics - weaker yen and higher stocks - further enhanced the inflow,” said Seiichi Niki, secretary-general of the Investment Trusts Association.

Prime Minister Shinzo Abe, who swept into power in late 2012 by calling for drastic economic stimulus to end deflation, has been pushing for more stock buying by Japanese investors, including the country’s giant pension fund.

The Nikkei stock average has gained nearly 50 percent and the yen has weakened about 20 percent against the dollar since late 2012.

The yen has weakened more than 20 percent as a result of the Bank of Japan’s massive asset purchase scheme since then, though the currency has been stuck in a narrow range in recent months.

Still, toushin only manages about five percent of assets held by Japanese households, who keep about a half of their $16 trillion savings in bank deposits.

$1 = 102.3700 Japanese yen Reporting by Shinichi Saoshiro and Hideyuki Sano; Editing by Jacqueline Wong

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