The recent $2 billion launch in Japan of the Nomura Global Trend fund, based on Man Investments’ AHL managed futures strategy, signals an important milestone in the convergence between alternative investments, traditional regulated fund vehicles, and retail distribution.

Up to now, the mutual fund industry in Asia lagged behind in the adoption of managed futures, long-short, market neutral, and other alternative and hedge fund strategies.  In contrast, alternative approaches within UCITS in Europe and ’40 Act funds in the US attracted nearly $40 billion so far in 2011.

The volume achieved by Nomura Global Trend is remarkable considering that fundraising occurred just after the earthquake and tsunami.  In total, mutual funds in Japan collected $20 billion of net inflows during May and June with a significant proportion benefiting real estate products. 

Nomura Global Trend combines Man AHL trading strategy with three big global themes: resources, Asia, and currencies.  The product was offered in three currency classes: (1) yen, (2) a basket of currencies driven by natural resources – Brazilian real, Australian dollar, and South African rand, and (3) a basket of Asian currencies - Chinese yuan, Indian rupee, and Indonesian rupiah.  The natural resource options raised 51% of the assets, and the Asian currency options raised 27%. 

The success of this fund will encourage more alternative strategy launches in Japan, the best fund market in the world for gathering assets through new introductions.  Hedge fund and other alternative managers will likely step up their activities and look to partner with the big distributors and fund selection units, especially over time as demand for alternatives develops in Asia among both private investors and institutions (recently, for example, the sovereign wealth fund of Korea noted its plan to increase alternative allocations).

More details in Strategic Insight Global's latest commentary, Trends, Innovation, ETFs & Convergence.

~ Jag Alexeyev

Public Content, Subscriber Content Japan, managed futures, resources, Asia, currencies