Invesco Asset Management (Japan) Ltd. will start selling investment trusts through the Long-Term Credit Bank of Japan on Dec. 1, but it does not expect to make money out of the project, according to the head of the firm.
“We are not trying to seek profits because there should be only 10 months or so to go” before the ban on banks themselves selling investment trusts is lifted, says Fumio Sueshige, president of the company, which is British in origin.
But this is going to be a good opportunity to publicize the firm’s products and help individual investors understand the merits and risks of investment trusts, Sueshige says. The deal between Invesco and LTCB is the first collaboration announced in Japan where a foreign institution will sell investment trusts, or mutual funds, in office space rented at a bank. The move is in line with a new phase of deregulation taking place in this sector.
At LTCB’s Shinjuku branch, Invesco plans to sell three kinds of funds, each managed in foreign bonds, foreign stocks, and a mixture of the two.
As with other fund management firms, Invesco is looking more eagerly toward the next phase of deregulation, which will permit banks themselves to sell investment trusts sometime after next April. In preparation, Invesco is contacting four to five city and regional banks as prospective vendors, according to Sueshige.
Some banks are expected to handle investment trusts for companies they are affiliated with and for other firms as well, to diversify their product offerings. Invesco’s criteria for picking bank partners includes credit risk, the number of branches usable as distributors and sales records for risk-inherent products, such as commodity funds, Sueshige says.
As of September, Invesco’s net assets under management accounted for 109 billion yen of the 45 trillion yen sitting in total domestic investment trusts. About 98 percent of the domestic investment trusts were sold through brokerages, while the remaining 2 percent were sold directly by investment trust firms.