RETAIL FUNDS | Cesar Tordesillas, Japan

Japanese mutual funds post biggest net inflow since May 2011

Japanese mutual funds experienced the biggest monthly net inflow in January since May 2011.

The overall asset value of mutual funds rose 6.4 percent to 68.15 trillion yen ($728.65 billion) in January, the highest level since August 2008, the Investment Trusts Association said.

This comes after retail investors poured into money reserve funds after locking in profits from rising domestic stocks and equity funds.

The yen's broad falls against the U.S. dollar, the euro, the Australian dollar and other currencies, and the broad strength of Japanese stocks, helped boost the asset value.

Overall mutual funds, or investment trust funds, saw a net inflow of 663.1 billion yen in January, up from 154.4 billion yen a month earlier.

Equity mutual funds suffered a net outflow of 115.2 billion yen in January, their third consecutive monthly net outflow as investors continued to take profits. A maturity of Japanese equity funds called Nomura Japanese stocks investment trust fund in January also prompted outflows.

Conversely, bond mutual funds saw the largest net inflows in six years as retail investors who took profits from equity funds and domestic equities parked their proceeds into money reserve funds (MRF), which are categorised as bond funds.

"Investors are continuing to lock in their profits reflecting the trend of the yen and share prices. This trend is still in place," Fumio Inui, vice president of the association, told a news conference.

"Investors are not only collecting proceeds from mutual funds, but investors who took profits from domestic shares are parking their proceeds in money reserve funds, which is boosting the asset value of bond funds," Inui said.

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