Tuesday, December 13, 2011

Japan investors' net fund selling biggest in 3 yrs

TOKYO (Dec 13): Net selling of mutual funds by Japanese retail investors in November marked the biggest outflow in three years as sharp volatility in global shares and the yen's strength chased them away from the fund market, an industry body said on Tuesday.

Domestic investment trust funds, a type of mutual funds known as toushin, saw net selling of 406.1 billion yen ($5.22 billion) in November, the biggest outflow since October 2008 -- a month after Lehman Brothers went bankrupt -- the Investment Trusts Association of Japan said.

The overall value of investment trust funds fell 5.7 percent or 3.4 trillion yen to 57.28 trillion yen ($736 billion) in November, the lowest since June 2009.

"Investors are refraining from investing in toushin after seeing a poor performance over the last few months," Fumio Inui, vice president of the association, told a news conference. "Investors also didn't want to make fresh purchases as markets have been very volatile over the past few months."

Falls in Japanese shares and the yen's appreciation against the euro especially hurt the investment performance of mutual funds during the month, Inui said.

The benchmark Nikkei average lost 6.1 percent in November and the broader Topix index fell 4.7 percent.

Equity mutual funds saw net outflows of 273.7 billion yen in November -- also the biggest net outflow since October 2008.

Bond funds also posted net outflows of 132.4 billion yen in November after seeing net inflows of 185.6 billion yen a month earlier, the association said.

The mutual fund market was expected to see net inflows on an annual basis this year for the 14th consecutive year, despite the recent increase in outflows, Inui said. Cumulative net inflows from January to November totalled 2.7 trillion yen.

Japan's mutual fund market is the second-largest in the Asia-Pacific region after Australia. Market participants closely watch the Japanese market due to its size, which is larger than the world's 17th-biggest economy, Turkey. - Reuters

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