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BNY Mellon plans stock funds for Japan retail

Tokyo, January 21, 2011

BNY Mellon Asset Management Japan plans to offer funds focused on emerging market equities to Japanese retail investors, a company executive said on Friday, in a bid to tap increasing appetite for risk.

The Japanese fund management unit of the world's top custodian, Bank of New York Mellon, also aims to expand its distribution channels by forming more partnerships with regional banks to grab a greater slice of the $768 billion Japanese retail investment trust fund, or toushin, market.

The firm plans to offer about six funds this year, including dividend-focused emerging market equities investment trust funds, Shizu Kishimoto, managing director of the company's retail marketing section, told a news conference.

"More focus could be put on equity funds based on the perception of an economic recovery," Kishimoto said.

She expects BNY Mellon's first emerging market equities fund of the year to have high weightings of shares from countries such as Brazil and Taiwan.

BNY Mellon Japan's assets under management in yen terms recovered to the pre-Lehman shock level of 725 billion yen as of November, while they reached a record high in dollar terms of $8.7 billion.

BNY Mellon in November offered a dividend-oriented fund that invests in equities from developed countries, including New Zealand, Australia and Singapore.

The company hopes to attract more of the total of around $15 trillion of retail money still largely parked in low-yielding postal and bank deposits.

It is also looking to diversify its distribution, as a total of about 80 per cent of its assets under management were distributed by three brokerages - Nikko Cordial Securities, Ichiyoshi Securities and Nomura Securities, Kishimoto said.

It hopes to expand its bank distribution channel to form about 10 partnerships with Japanese regional banks in two to three years, she said-Reuters




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