Ucits ‘here to stay’ in Asia

Asia_globeA continued demand for cross-border funds and a lack of effective domestic regulation will ensure Ucits funds remain widespread in Asia. A report by researcher Cerulli Associates found that assets in cross-border funds in Asia excluding Japan rose nearly 19% last year. Several initiatives, such as the mutual recognition of funds (MRF) scheme, which connects Hong Kong with mainland China, aim to facilitate cross-border funds within Asia. But Cerulli Associates found that Europe-domiciled Ucits funds “have not lost their shine”. “Asian managers looking beyond their home markets tend to see launching Ucits funds as a preferred strategy for expansion, while global managers would likely use this structure to expand their businesses in key Asian markets,” said a statement from the company. Besides MRF, regional passporting initiatives include the Asia Region Funds Passport, which is anticipated to launch this year, and the Collective Investment Schemes framework from the Association for Southeast Asian Nations. Neither scheme has accumulated substantial assets yet. “Ucits are here to stay in the region and will maintain their lead, at least until the time regulations evolve,” said Leena Dagade, associate director at Cerulli Associates. ©2018 funds global asia

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