Japan investors' net fund selling biggest in 3 yrs

by **hlk** Tue 13 Dec 2011, 19:32

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