Asia ex-Japan the new ‘investment destination’

Asia ex-Japan is rapidly replacing global emerging markets as the asset allocation destination of choice for institutional investors, says Mirae Asset.

Speaking to InvestorDaily, Mirae Asset chief executive Jung Ho Rhee said allocations to Asia ex-Japan recently surpassed global emerging markets (GEM) in the portfolios of UK public mutual funds.

Mr Rhee, who heads up asset allocation for US$90.3 billion Korea-headquartered fund manager Mirae Asset, challenged the popular ‘developed market versus GEM’ mindset.

“We don’t see the world as GEM versus developed – we view the world as Asia-Pacific [ex-Japan] and the rest of the world,” he said.

Traditionally, Japan is considered as being in a different asset allocation ‘bucket’ to the rest of Asia, Mr Rhee said.

“But after the rise of China and India and the huge gravitation of power by these two big engines, Japan is becoming rapidly integrated into this one region,” he said.

In the near future, Asia-Pacific (including or excluding Japan) could become one of the big independent asset allocation destinations for global investors, Mr Rhee said.

Mirae Asset is well positioned for the trend, with local investment teams in Korea, Hong Kong, China, India and Taiwan, he said.

The Korea-based asset manager, which is celebrating its 20th anniversary this year, has been establishing a presence in Australia for the past year – culminating in the launch of Mirae’s Asia Great Consumer fund to local investors in late 2016.

The firm is planning to set up the Asia Sector Leader fund next, as well as its Indian Sector Leader fund.

Mirae Asset has a substantial ETF business worldwide (including a majority non-controlling stake in Australian provider BetaShares) along with its active management business, which focuses on the Asia ex-Japan market.