Investment grade (IG) bonds, private debt and multi-asset funds will be top of mind for investors over the next year, according to Asian fund distributors polled for a Coalition Greenwich report. High-grade government bonds are also set to be popular instruments.
Emerging market debt, by contrast, is expected to continue its three-year run of outflows.
Asian fund distribution platforms have reported positive net asset growth across equities, fixed income and multi-asset funds over the year, the report found. According to Coalition Greenwich’s market sizing research, mutual funds in APAC were sized at US$8.2 trillion in 2024. They are expected to grow to US$8.9 trillion in 2025 – and US$12.7 billion in 2029.
The report, authored by Coalition Greenwich’s Asia head of investment management Ken Yap, noted that flows into private markets are also set to increase in the region. Close to half (45%) of Asian fund distributors polled expect significant increases in private debt inflows, even more than the 43% expected similar growth in private equity flows. Just 10-12% expect decreased flows in either class.
Retail banks are also seeing an increase in demand for private debt, and 26% expect a major increase over the next year. This reverses 2024’s predictions of a decline.
Elsewhere, US equities are losing their appeal – two thirds of those polled expected inflows to increase significantly in the 2024 survey, a figure that has now fallen to 49%. A third now expect to see a significant decrease in flows. However, this sentiment change could have been skewed by the timing of the survey, Coalition Greenwich observed – US equities underperformed in the first half of the year, and volatility spiked amid tariff developments.
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