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RETAIL FUNDS | Cesar Tordesillas, Japan
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Japan mutual funds fell hardest in 8 months

The asset value of Japanese mutual funds fell in May as a surging yen and plunges in global share prices hurt performance.

This the most it went down since August 2011.

The value investment trust funds, a type of mutual fund known as toushin in Japan, fell 3.9 trillion yen, or 6.4 percent to 57.32 trillion yen or $720.96 billion, the Investment Trusts Association said.

The yen advanced 9 percent against the euro and 9.2 percent against the Australian dollar.

Retail investors continued to direct their money into mutual funds, such as the real estate investment trust funds and emerging market funds, to diversify their portfolios and seek returns by buying newly launched funds.

Overall, mutual funds saw net inflows of 323.5 billion yen in May compared with 405.1 billion yen in the previous month, the association said. Net inflows into equity mutual funds in May totaled 616.2 billion yen - the largest since August 2011.

"We've seen net inflows picking up in recent months, but we need to be watching the situation with great concerns for this month and months ahead after seeing such a drop in investment performance," Fumio Inui, the association's vice president, told a news conference.

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