Japan fund sales show risk appetite: Morningstar

Written by Bloomberg | Updated: May 31 2009, 06:09am hrs
Makiko Asai

Japans new mutual-fund sales rose in May to the highest level since the Lehman Brothers Holdings Inc bankruptcy in September, indicating private investors may be regaining their appetite for risk, said Morningstar Japan KK.

Sales of new mutual funds rose to 333 billion yen ($3.5 billion) this month, the most since July 2008, according to data compiled by Bloomberg. Japanese consumer confidence climbed to a 10-month high in April, and the Nikkei 225 Stock Average has gained 35% from the 26-year low reached on March 10.

Investors latitude has widened as investments, including Chinese and Indian stocks and bonds, have risen in value, said Tomoaki Fujii, a senior analyst at Morningstar Japan.

Nomura Holdings Inc, Japans biggest securities firm, posted 232 billion yen total sales of three funds this month as its Nomura Global Semiconductor Stocks 0905 attracted 87.6 billion yen, the most for a single fund since November 2007.

We have a lot of inquiries for new funds, said Riyo Azechi, a spokeswoman at Nomura Holdings. I have the impression that more customers are investing in stock-related funds, including overseas shares.

Individual investors ready to jump back into stocks are following some institutions with similar risk appetite. Nippon Life Insurance Co, Japans biggest life insurer, said in April it plans to increase investment in equities by as much as 100 billion yen, bucking a trend that has smaller rivals maintaining or trimming holdings.

Tomiji Akabayashi, general manager of the insurers finance and investment planning division, said Nippon Life aimed to take advantage of a decline that drove the Nikkei 225 Stock Average down 35% in the year ended March 31, its worst annual performance since the 12 months through March 2001.

Japanese life insurers, mostly mutual societies owned by policyholders, are seeking to boost returns because they sold policies in the 1980s with projected yields of as much as 6%.