Brief Introduction about CLIIF
The CEIBS Lujiazui International Institute of Finance (CLIIF) was initiated by the China
Europe International Business School (CEIBS) and the Shanghai Lujiazui (Group) Co., Ltd. in
October 2007. The purpose of CLIIF is to carry out social influence research and facilitate theconstruction of Shanghai International Financial Center, for China's macro-economic control
and financial stability. Based in Shanghai, CLIIF shall serve as an open and international
platform for academic exchange while focusing on studying the opportunities and path to thefinancial opening-up and development of the service industry under the new development
pattern. CLIIF is committed to providing first-class research, consulting and training services
to financial institutions, financial regulation agencies, financial investors, and consumers, as it
fulfils its role as an influential think tank for the development of Shanghai as an international
financial center and promotes a "going-out strategy" for China's financial institutions andenterprises.
Each year, CLIIF undertakes more than 10 key financial research projects commissioned by the
Shanghai Local Financial Regulatory Bureau, submits more than 60 special reports for
decision-making consulting research, and organizes more than 20 sessions of forums and salons.
CLIIF also publishes academic research works and delivers more than 100 articles in various
newspapers and media. Notably, CLIIF has innovatively developed the "Global AssetManagement Center Evaluation Index", and has continuously released four index reports since2021, which has attracted increasing attention and recognition across various sectors.
In December 2022, CEIBS established the "CEIBS Lujiazui Finance 50 Forum (CLF50)",
based on the foundation of CLIIF. This forum brings together more than 100 economic andfinancial experts, aiming to build a dynamic platform for economic and financial discourse. It
focuses on fostering growth and thought exchange in Shanghai and the Yangtze River Delta
Area, positioning itself as a hub with significant potential for development in these regions.
CLF50 is currently co-chaired by Professor Jiang Jianqing (Director of CLIIF and Former
Chairman of ICBC) and Professor Wang Hong (Chairwoman of CLIIF and President of CEIBS);
Professor Zhu Xiaoming (Founding Chairman of CLIIF and President Emeritus of CEIBS) andProfessor Tu Guangshao (Chairman of the Shanghai Finance Institute and Former Executive
Vice Mayor of Shanghai) serve as Advisors; Professor Sheng Songcheng (Senior Academic
Advisor of CLIIF and Former Director of the Survey and Statistics Department of the PBoC),
Professor Zhao Xinge (Executive Deputy Director of CLIIF) and others serve as the ChiefExperts.

For more information, please scan the QR
WeChatCONTENTS

EXECUTIVE SUMMARY ................................................................................................................ 1
PART 1 INDEX EVALUATION..................................................................................................... 5
Comprehensive Evaluation ................................................................................................ 5
Evaluation of Subdivided Fields ....................................................................................... 7
Appendix: Indicator System ............................................................................................ 15
PART 2 ANALYSIS OF KEY INDICATORS.............................................................................. 19
Demand Side ....................................................................................................................... 19
Topic 1: Asset Allocation Characteristics of Sovereign Wealth Funds (SWFs) .. 20
Supply Side .......................................................................................................................... 23
Topic 2: Strong Performance of U.S. Technology Stocks ........................................ 27
Business Side ....................................................................................................................... 30
Topic 3: AuM of Asset Managers Expanded Significantly ...................................... 31
PART 3 ANALYSIS OF REGIONAL CHARACTERISTICS ...................................................... 42
Europe ................................................................................................................................... 42
North America .................................................................................................................... 50
Asia-Pacific ........................................................................................................................... 59
OUTLOOK ..................................................................................................................................... 70

LIST of TABLES
Table 1-1 Global Asset Management Center Ranking（2024） .............................................. 5
Table 1-2 Global Asset Management Center Ranking of Subdivided Fields (2024)................. 7
Table 1-3 Weights of Tier 2 Indicators (2023-2024) ............................................................... 16
Table 1-4 Global Asset Management Center Evaluation Indicator System (2024) ................. 17
Table 2-1 Top 15 Sovereign Wealth Funds in the Middle East (2023) .................................... 22
Table 2-2 One-Year Returns of Major Asset Management Products Investing in U.S.
Technology Stocks (2024) ....................................................................................................... 29
Table 2-3 Changes in the AuM of the world's top 10 asset managers (2023-2024) ................ 32
Table 3-1 Timeline and depth of interest rate cuts by central banks in developed countries(bps, 2024) ............................................................................................................................... 43
Table 3-2 Comparison of Yield Spreads Between High-yield Bonds in Europe and America(bps, 2024) ............................................................................................................................... 45
Table 3-3 BlackRock uses AI to improve user experience and interfaces ............................... 52
Table 3-4 BlackRock uses AI to improve user experience and interfaces ............................... 54
Table 3-5 Japan Special Zone for Financial and Asset Management Business ....................... 61
Table 3-6 Successful cases of Japan's financial market entry office ....................................... 62
Table 3-7 Licensing of virtual asset trading platforms ............................................................ 63
Table 3-8 HKEX Virtual Asset ETF ........................................................................................ 64
Table 3-9 Advantages and disadvantages of virtual asset ETFs, futures, and direct
participation ............................................................................................................................. 65
Table 3-10 Adjustments to the range of eligible products of equity ETFs under Stock Connect................................................................................................................................................. 66

LIST of FIGURES
Figure 1-1 Global Asset Management Center Ranking of Capital Source (2023-2024) ........... 8
Figure 1-2 Global Asset Management Center Ranking of Institutional Opening and Talent
Reserve(2023-2024) ................................................................................................................ 10
Figure 1-3 Global Asset Management Center Ranking of Underlying Assets (2023-2024) .... 11
Figure 1-4 Global Asset Management Center Ranking of Asset Managers and Open-ended
Fund (2023-2024) .................................................................................................................... 12
Figure 1-5 Global Asset Management Center Ranking of ESG Business and Alternative
Assets(2023-2024)................................................................................................................... 13
Figure 1-6 Global Asset Management Center Ranking of Growth Rate(2023-2024) ............. 14
Figure 1-7 Global Asset Management Center Evaluation System .......................................... 15
Figure 2-1 Balance of Payments: Financial Account (mn＄, 2023-2024) .............................. 19
Figure 2-2 Top 10 Global Sovereign Wealth Funds and Their Asset Management Scale (2023)................................................................................................................................................. 20
Figure 2-3 Asset Allocation Categories of Middle Eastern Sovereign Wealth Funds (20202023)........................................................................................................................................ 23
Figure 2-4 Number of Employees in Financial Industry and Proportion to Non-Agriculture
Employees (10000, %,2023) ................................................................................................... 24
Figure 2-5 Average Long-term Government Bond Yield（%） ............................................. 25
Figure 2-6 Returns of Major Stock Indexes（12 months, %） .............................................. 26
Figure 2-7 Stock Market Capitalization and Growth Rate (tn＄, %) ...................................... 27
Figure 2-8 NASDAQ 100 Index（2023-2024） .................................................................... 28
Figure 2-9 Turnover of Futures and Options (tn＄) ................................................................ 30
Figure 2-10 AuM and Growth Rate of Top 5 Asset Managers with Local Headquarters (tn＄, %) ...................................................................................................................................... 31
Figure 2-11 BlackRock AuM size and structural changes (2023-2024, trillion USD) ............ 33
Figure 2-12 S&P 500 Index and Aum of BlackRock Equity Product (2023-2024, trillion USD)................................................................................................................................................. 34
Figure 2-13 Fed Funds Rate and BlackRock Net Flows of Various Products (2022-2024,
trillion USD, %) ...................................................................................................................... 35
Figure 2-14 Net Flows and Proportion of BlackRock ETF (2023-2024, USD 2024) ............. 36
Figure 2-15 Net Sales of Open-end Funds (bn＄) ................................................................... 37
Figure 2-16 Total Net Assets and Growth Rate of ETF (bn＄, %) .......................................... 38
Figure 2-17 Net Sales of ETF (bn＄) ...................................................................................... 39
Figure 2-18 Number of ESG Products .................................................................................... 40
Figure 2-19 Total Net Assets and Growth Rate of Alternative Investment (bn＄, %) ............ 41
Figure 3-1 ECB Key Rate and Euro Area Government Bond Yields (%, 2020-2024) ............ 44
Figure 3-2 Europe AuM and UK share (EUR trillion, 2017-2023) ......................................... 46
Figure 3-3 Expected timeline for the supply of tokenized products ........................................ 47
Figure 3-4 Luxembourg fund count and AuM (billion euros, 2004-2023).............................. 48
Figure 3-5 Distribution of Originator Sources for Funds Domiciled in Luxembourg (2023) . 49
Figure 3-6 Number of Global Cross-border Funds and Cross-border Distribution Registrations(2013-2023) ............................................................................................................................. 50

Figure 3-7 AI-empowered asset management value chain to improve efficiency (%) ............ 51
Figure 3-8 The progress of AI integration in the investment process ...................................... 53
Figure 3-9 United States Private Equity Fundraising (USD billion, 2013-2023).................... 55
Figure 3-10 Private Equity Exit Size (USD billion, 2013-2023)............................................. 56
Figure 3-11 Private Equity Secondary Market Transaction Size (USD billion, 2002-2023) .. 57
Figure 3-12 Canada asset management institution's fintech layout plan for the next three years................................................................................................................................................. 58
Figure 3-13 Canada's asset managers' investment strategies and tools over the next five years................................................................................................................................................. 59
Figure 3-14 Comparison of household asset allocation structure in Japan, Euro Area andUnited States (%, 2023) ........................................................................................................... 60
Figure 3-15 ETF turnover under Stock Connect (HK$ billion, RMB 100 million, 2023.052024.06) ................................................................................................................................... 67
Figure 3-16 Cumulative subscription of Chinese Mainland-Hong Kong Mutual Recognition
Funds (100 million yuan, 2016-2024) ..................................................................................... 68
Figure 3-17 Number of IPOs on the Hong Kong Stock Exchange (2012-2023)..................... 69

2024 Global Asset Management Center Index Report

EXECUTIVE SUMMARY
Since 2023, the world has broadly faced persistent inflationary pressures and challenges in
economic recovery. Central banks initially intended to curb consumer spending by raisinginterest rates, thereby cooling down overheated sectors of the economy. However, these highinterest-rate measures have also led to increased borrowing costs, reduced loan volumes andoverall business investments, further causing fluctuations in asset prices: bond yields have risen,stock market valuations have faced downward pressure due to higher discount rates on future
earnings, and the entire asset class faced the risk of re-evaluation. As a result, investors haveaccordingly shifted to more conservative investment strategies. In 2024, this trend has
somewhat slowed down, but there has been no fundamental reversal. These changes in capital
flows, shifts in asset allocation, and ongoing economic and market feedback continue to reshape
the landscape of global asset management centers.
The 2024 Global Asset Management Center Evaluation Index Report is divided into three parts.
The first part presents the latest rankings of the world’s major asset management centers.
Against the backdrop of high interest rates, global capital flows have generally tilted towards
Europe and North America, with the scores and rankings of asset management centers in the
United States and Canada generally rising, while those in Asia slightly have declined, and theEuropean market has showed mixed results.
New York continues to lead globally, but its overall score has declined compared to previous
years, indicating that the gap with other cities has narrowed. The trend of capital outflows from
London’s equity and bond markets to other Eurozone countries has not yet ended; however, thestrong performance of its top asset management institutions has brought it back to second place.
Amid economic uncertainty, global demand for risk-hedging products has continued to rise,
which has not only elevated Chicago to third place but also boosted Frankfurt’s ranking. Parishas remained relatively stable but has been surpassed by Chicago and Frankfurt, dropping to
fifth place.
Due to the slowdown in capital flows in Asia, Singapore, Shanghai, and Tokyo have each
dropped one position compared to last year, ranking sixth, seventh, and tenth respectively.
Benefiting from its significant advantages in ESG and other sustainable products and alternative
assets, Luxembourg has risen to eighth place. Although Hong Kong leads Asia in the family
office and virtual asset management products, its equity and bond markets remain sluggish,
resulting in only slightly rose to ninth place. Beijing remains in fifteenth place, but its score has
improved significantly, showing some momentum in catching up.
Specifically, in the ranking of the six sub-sectors:
In terms of capital source and overseas capital inflow indicators, the United States still leads
the world. However, unlike last year, the gap between the United States and other countries has

12024 Global Asset Management Center Index Reportnarrowed, reflecting a slowdown in global capital flows. The high-interest-rate environment
has increased borrowing costs (especially in the United States), suppressing international
investors' financing capacity and willingness, and leading them to re-evaluate the risk assets intheir portfolios.
From the perspective of institutional openness and talent supply indicators, Zurich continues tolead globally, while most cities have widened their gap with it compared to 2023. Influences
include economic structural transformation, automation and digitization, regulatory changes,
and macroeconomic cyclical factors, have led to three different trends in financial industry
employment and its share of non-agricultural employment.
In terms of the quantity and quality of underlying assets, asset management centers in Europe
and North America have generally closed the gap with New York in 2024, especially in cities
like Toronto, Dublin, and Luxembourg. Rising global energy prices and significant profit
growth in resource-based companies have driven the performance of related stocks on theToronto Stock Exchange. In contrast, Asia's stock and bond markets have weakened due tointerest rate differentials, slowing economic growth, and shrinking international trade, widening
the gap with New York and placing them at a relative disadvantage in global capital markets.
When assessing the scale of assets under management (AuM), such as the size and number ofasset management companies and open-end funds, scores have generally increased across mostcities. Notably, Shanghai, Chicago, and London saw significant growth, primarily due to theglobal expansion and market innovation capabilities of asset management institutions. London,
through innovative and flexible policy adjustments in 2024, enabled asset managementcompanies to quickly adapt to market changes and expand their global business, helping thecity maintain its competitiveness in the global asset management market. Additionally, with therelaxation of foreign investment access and the further opening of capital markets in China, thescale of assets managed by Shanghai-based institutions has also grown significantly.
Regarding the number and scale of ESG products listed on exchanges and alternative asset
funds, Frankfurt, Luxembourg, and Paris remain the top three European cities. In Asia,
Singapore and Hong Kong showed the most significant increases, while Tokyo and Shanghai
saw smaller gains. Both Singapore and Hong Kong are actively exploring blockchain, digitalassets, and other areas, with the development of tokenized securities and digital asset platforms
is creating more opportunities for managing and trading alternative assets.
The second part of this report discusses several key indicators from the demand side, supply
side, and business side. In the context of a slowdown in the Federal Reserve's high-interest-rate
policy, capital inflows into the United States have decreased. Sovereign wealth funds areplaying an increasingly important role in global financial markets, particularly in the Middle
East, where investments in alternative assets and renewable energy have grown significantly.
On the supply side, although the overall financial industry employment has declined in somemajor financial centers, cities like Luxembourg, Dublin, and Frankfurt have seen increases due
to business shifts and economic restructuring. Furthermore, an analysis of underlying assets
2

2024 Global Asset Management Center Index Report
indicates that North American and European asset management centers remain strong in thebond and stock markets, while Asian regions, due to slowing economic growth and narrowinginterest rate differentials, have shown relative weakness.
The business side primarily explores the scale and growth of asset management institutions(AuM). Global asset management institutions continue to expand, particularly in asset
management centers like New York, London, and Shanghai. The rapid expansion of top global
asset management institutions like BlackRock and Vanguard Group reflects the positive impact
of global economic resilience and policy expectations on the asset management industry.
Additionally, ESG (Environmental, Social, and Governance) products and alternative assets
have become an important part of the business side of asset management centers, with Europe
particularly leading in this area.
The third part of this report presents the latest development trends of asset management centersin Europe, North America, and the Asia-Pacific region. The start of the interest rate cut cycle inEuropean markets has created investment opportunities for fixed-income products, particularlyin the European high-yield bond market, where the spread is relatively large, offering investors
a substantial premium. At the same time, the United Kingdom is committed to promoting fundtokenization through distributed ledger technology, an innovative initiative that is expected to
improve fund management efficiency and enhance market liquidity. Luxembourg, as animportant fund registration center in Europe and globally, continues to attract fund companies
from around the world, further solidifying its leading position in cross-border fund distribution.
In North American markets, asset management centers such as New York and Boston areleveraging the power of financial technology, particularly artificial intelligence, to significantly
enhance the operational efficiency and investment decision-making capabilities of the asset
management industry. The United States has optimized investment management, trading
execution, and customer service through AI technology, keeping its asset management
institutions ahead in global competition. Canada, on the other hand, tends to focus on cloudcomputing and blockchain technology, enhancing the proactivity and flexibility of investment
strategies.
Asset management centers in the Asia-Pacific region show their respective advantages andchallenges. Japan has announced the establishment of four asset management special zones in
Sapporo, Tokyo, Osaka, and Fukuoka, bringing significant policy opportunities. Hong Kong,
through the construction of a virtual asset center, has enriched the supply of asset management
products and increased the allocation choices between Hong Kong and mainland China by
deepening cooperation with mainland capital markets. Singapore, through continued promotionof blockchain and digital asset development, is creating more opportunities for managing andtrading alternative assets.
Overall, in the 2024 global asset management center index rankings, Shanghai has fallen fromsixth to seventh place. This decline reflects the challenges Shanghai faces in several key areas
within the new competitive landscape of global asset management centers, but the growthresilience of Shanghai’s asset management sector remains strong, and its structural highlights
32024 Global Asset Management Center Index Reportcontinue to stand out. On one hand, the slowdown in global capital flows and China’s economic
growth has reduced the attractiveness of Shanghai’s underlying assets, particularly in stock andbond yields, directly affecting Shanghai’s competitiveness in the global asset management
market. In terms of the global expansion of asset management institutions, although the top fiveasset management institutions in Shanghai collectively manage $1.8 trillion with a growth rateof 12.50%, this still lags the expansion speed of other major global leading asset management
centers like New York and London. Additionally, Shanghai’s ability to attract international asset
management institutions to set up headquarters and expand their business remains limited,
restricting its influence and voice in global capital markets. In the increasingly important fieldof alternative asset management, Shanghai shows some growth potential, but its overall scaleremains small, unable to catch up with competitors such as Singapore and Hong Kong.
Furthermore, Shanghai has been slower in promoting the development of emerging financial
fields such as digital assets and blockchain technology, missing the opportunity to fully
capitalize on the growing global demand for sustainable and innovative investments. In the
future, Shanghai needs to be more proactive in promoting the opening and reform of financial
markets, increasing investment and innovation in emerging fields, and enhancing its
competitiveness in the global asset management market.
Notably, Shanghai’s structural highlights in the asset management field show its stableadvantages and growth resilience. First, its capital source scale is second only to New York.
Local asset management institutions such as Ping An Asset Management have significantly
improved their expansion capabilities. The net sales of open-end funds are nearly $110 billion,
ranking among the top in the world, second only to New York and Dublin. ETF net inflows areclose to $60 billion, with both scale and growth rate among the top globally. Additionally the
total number of ESG products has increased by 22% compared to the same period last year,
reflecting the market’s positive response to the government’s stable policies on sustainable
development. This contrasts with the trend of some U.S. asset management institutions
withdrawing from related climate investment agreements, sending a positive signal tointernational investors about the stability of China’s policies. Although the scale of alternative
investments remains relatively small, its growth rate of 29% ranks among the highest globally.

4

2024 Global Asset Management Center Index Report

PART 1 INDEX EVALUATION
Comprehensive Evaluation
In 2024, New York, London, and Chicago ranked as the top three global asset management
centers. Against the backdrop of high interest rates, global capital flows generally tilted towards
Europe and North America, with the scores and rankings of asset management centers in the
United States and Canada generally rising, while those in Asia declined, and the European
market showed mixed results.
Table 1-1 Global Asset Management Center Ranking（2024）

Ranking

City

Score

Score change
compared to 2023

Ranking change
compared to 2023

1

New York

95.5

-0.5

0

2

London

86.1

+2.4

+1

3

Chicago

86.0

+1.7

+1

4

Frankfurt

85.8

+2.4

+3

5

Paris

85.7

+0.9

-3

6

Singapore

85.2

+0.7

-1

7

Shanghai

85.1

+1.7

-1

8

Luxembourg

84.9

+2.3

+3

9

Hong Kong

84.8

+2.0

+1

10

Tokyo

84.6

+1.5

-1

11

Boston

84.2

+0.9

-3

12

Dublin

84.1

+1.8

+1

13

Toronto

83.3

+0.9

+1

14

Zurich

82.5

0.0

-2

15

Beijing

82.4

+2.0

0

New York continues to lead globally, but its overall score has declined compared to previous
years, indicating that the gap with other cities has narrowed. The trend of capital outflows from
London's equity and bond markets to other Eurozone countries has not yet ended, but the strong
performance of its top asset management institutions has brought it back to second place. Amid

5

2024 Global Asset Management Center Index Reporteconomic uncertainty, the global demand for risk-hedging products has continued to rise, which
has not only elevated Chicago to third place but also boosted Frankfurt's ranking. Paris hasremained relatively stable but has been surpassed by Chicago and Frankfurt, dropping to fifth
place.
Due to the slowdown in capital flows in Asia, Singapore, Shanghai, and Tokyo have all dropped
one position compared to last year, ranking sixth, seventh, and tenth, respectively. Benefitingfrom its significant advantages in ESG and other sustainable products and alternative assets,
Luxembourg has risen to eighth place. Although Hong Kong leads Asia in the family office andvirtual asset management products, its equity and bond markets remain sluggish, only slightly
rising to ninth place.
Boston and Zurich have both slipped slightly, ranking eleventh and fourteenth, respectively.
Dublin and Toronto have each risen one position to twelfth and thirteenth. Beijing remains in
fifteenth place, but its score has improved significantly, showing some momentum in catchingup.
The rankings of the major global asset management centers in the six sub-sectors in 2024 are
as follows:62024 Global Asset Management Center Index Report
Table 1-2 Global Asset Management Center Ranking of Subdivided Fields (2024)

Ranking

CapitalInstitutional

Underlying

Asset

ESG

GrowthSourceOpenness,

AssetsManagement

Business,

Rate (10%)(15%)

Talent(25%)

Institutions,

Alternative

SupplyOpen-End

Assets (15%)(10%)

Funds (25%)

1

BostonZurichNew York

New YorkFrankfurt

Chicago2

New York

Hong Kong

TorontoBostonLuxembourg

Zurich3

ChicagoLuxembourg

LondonLondonParis

Shanghai

4

Los Angeles

Singapore

Shanghai

ChicagoSingapore

London5

Beijing

Dublin

Tokyo

Tokyo

Hong Kong

Hong Kong

6

ShanghaiFrankfurtFrankfurt

DublinLondonBoston7

Paris

Boston

Paris

Paris

Dublin

Paris

8

Tokyo

New York

DublinSingaporeTokyo

Beijing

9

Hong Kong

ChicagoHong Kong

Luxembourg

ChicagoSingapore

10

Singapore

Los Angeles

Singapore

Toronto

ZurichFrankfurt

11

LondonLondonLuxembourg

Frankfurt

New York

Tokyo

12

TorontoTokyo

ChicagoShanghaiTorontoDublin13

ZurichTorontoBeijing

Los Angeles

Shanghai

New York

14Frankfurt

Paris

ZurichHong Kong

Beijing

Toronto15

Luxembourg

Shanghai

BostonBeijing

BostonLos Angeles

Note: 1. The "Capital Source" indicator is a national/regional indicator, so cities in the same country haveconsistent rankings and scores. The rankings are listed separately for clarity in the table. 2. The figures inparentheses represent the weight of each secondary indicator, as detailed in the appendix on the revision of theindicator system in this section.

Evaluation of Subdivided Fields
Capital Source
The scale of demand for asset management business funding is compared using seven indicators:
local funding pools (bank deposits, premium balances, private pension fund size, foreignexchange reserves, sovereign wealth fund (SWFs) size, public pension fund (PPFs) size) and7

2024 Global Asset Management Center Index Reportoverseas capital inflows (i.e., financial account balance). The United States still leads globally,
but unlike last year, the gap between the United States and other countries is narrowing. For
example, Beijing and Shanghai’s scores rose from 97.1 to 99.4, and Paris and Tokyo’s scores
increased from 85 to above 88. This reflects a slowdown in global capital flows. In terms of
direct investment, global supply chain instability and geopolitical risks have prompted somecountries to reduce their dependence on external economies, promoting “localization” ofproduction and investment, thereby reducing reliance on international markets (including the
U.S. market). In terms of indirect investment, the high-interest-rate environment has increased
borrowing costs (especially in the United States), suppressing international investors' financing
capacity and willingness, leading them to re-evaluate the risk assets in their portfolios.
Figure 1-1 Global Asset Management Center Ranking of Capital Source (2023-2024)

105
100

2024
2023

95
90
85

80

Note: The secondary indicators are all at the national/regional level. Therefore, the ranking of cities
in the same country is consistent.

82024 Global Asset Management Center Index Report

Business Environment
The business environment is evaluated based on institutional openness (degree of FDI
restrictions, statutory corporate income tax rates, capital gains tax rates, and personal income
tax rates) and talent supply (employment in the financial industry, financial industry
employment/non-agricultural employment ratio). Zurich still leads globally, and the gap
between it and most other cities has widened significantly compared to last year. The main
variable is the number of jobs in the financial industry and its share of non-agricultural
employment. Three scenarios are observed:⚫

The number of jobs in the financial industry increases, and its share also increases, as seenin Luxembourg, Dublin, Frankfurt, and Zurich, primarily benefiting from the transfer offinancial business to the Eurozone after Brexit. Scores for these cities have improved by
1.8, 3.9, and 7.1 points, respectively, compared to last year.

⚫

The number of jobs in the financial industry increases, but other non-agricultural jobs
increase even more, leading to a decrease in its share, as seen in New York and Paris,
where scores have dropped by 2.4 and 4.9 points, respectively, compared to last year.

⚫

The number of jobs in the financial industry decreases, and its share also decreases, asseen in Boston, Chicago, London, Toronto, Singapore, Beijing, and Hong Kong.

The reasons for these trends are as follows:Firstly, the economic structure is transitioning from a traditional finance-dominated model to amore diversified economic model. Industries like new energy and healthcare are rapidly
growing, attracting significant investment and labor inflows, reducing the relative importanceof the financial industry within the broader economy.
Secondly, automation and digitization, with the application of technologies such as artificial
intelligence and blockchain, have greatly increased the efficiency of financial services while
reducing the demand for labor. Many traditional roles, such as traders and data processors, arebeing replaced by technology, directly leading to a decrease in the number of jobs in thefinancial industry.
Thirdly, changes in the regulatory environment, with stricter global financial regulations undermacroeconomic volatility, have increased capital requirements, risk management, andcompliance checks for financial institutions. These changes have raised the operating costs ofthe financial industry and reduced profit margins. Some financial institutions have opted todownsize, reduce employment, or shift their business to lower-capital-intensive areas such as
fintech.

9

2024 Global Asset Management Center Index Report
Finally, macroeconomic cyclical factors also affect employment in the financial industry.
During economic expansion periods, financial activity increases, and industry employment
tends to rise; during economic contractions or periods of increased uncertainty, the financial
industry often reduces costs through layoffs and reduced hiring. These cyclical fluctuations
impact the financial industry's share of total employment.
Figure 1-2 Global Asset Management Center Ranking of Institutional Opening andTalent Reserve (2023-2024)
105
100
2024
95

2023

90

85
80
75
70

Underlying Assets
When evaluating underlying assets, using indicators such as the absolute scale and quantity ofstock markets, bond markets, and futures markets, as well as the quality of underlying assets
measured by ten-year government bond yields and one-year stock market returns, asset
management centers in Europe and North America have generally closed the gap with New
York this year, especially Toronto (+5.4), Dublin (+4.0), and Luxembourg (+3.3). Toronto has
benefited mainly from the strong performance of the energy and resource industries. In 20232024, global energy prices rose, and the profits of resource-based companies increased
significantly, driving the performance of related stocks on the Toronto Stock Exchange (TSX).
At the same time, the financial markets in Toronto and New York share similar layouts in somekey industries, such as finance, technology, and manufacturing. Therefore, when theseindustries perform well in the U.S. market, corresponding sectors in the Toronto market tend to
be positively affected. In contrast, Asian regions have seen a widening gap with New York due
to factors such as interest rate differentials, slowing economic growth, and shrinking
international trade driven by weak demand in Europe and the United States. Scores for Shanghai

102024 Global Asset Management Center Index Report(-2.2), Tokyo (-1.8), Hong Kong (-0.9), and Singapore (-0.4) have all declined compared to lastyear, placing them at a relative disadvantage in global capital markets.
Figure 1-3 Global Asset Management Center Ranking of Underlying Assets (20232024)
105
100
2024

95

2023

90
85
80
75
70

Asset Management Business
When observing the scale of assets under management (AuM) in various asset management
centers, using indicators such as the combined scale of the top five local asset managementcompanies, the number of headquarters and branches of the world's top 50 asset management
institutions in the locality, and the net asset scale, quantity, and net sales of open-end funds andETFs, the scores show that only Paris (-0.1), Toronto (-1.2), and Zurich (-0.7) have declined,
indicating that their gap with New York has widened, while other cities have generally
improved. Notably, Shanghai (+3.2), Chicago (+2.6), and London (+2.1) have seen significant
increases. On the one hand, this is due to the global expansion and market innovation
capabilities of asset management institutions. Despite the challenges of Brexit, London quickly
adapted to market changes in 2024 through innovative and flexible policy adjustments,
expanding its global business and helping London maintain its competitiveness in the global
asset management market. Similarly, with the relaxation of foreign investment access andfurther opening of capital markets, the scale of assets managed by Shanghai-based institutions
has also grown significantly. On the other hand, compared to New York and Chicago, Toronto
has relatively less advantage in attracting global asset management institutions to set up
headquarters or branches. As global asset management institutions shift more resources andbusiness to markets with greater growth potential, Zurich's attractiveness as a traditional
financial safe haven has relatively declined. The collapse of Credit Suisse in 2023, in particular,

112024 Global Asset Management Center Index Report
not only shook investor confidence in the Swiss financial market but also made global asset
management institutions more cautious about setting up branches and expanding business in
the region.
Figure 1-4 Global Asset Management Center Ranking of Asset Managers and Openended Fund (2023-2024)

105
100
2024

95

2023

90
85
80
75
70

ESG and Alternative Business
When evaluating the number and scale of ESG bonds, indices, ETFs, and derivatives listed on
exchanges, as well as the number, net asset scale, and net sales of alternative asset funds,
Frankfurt, Luxembourg, and Paris continue to rank as the top three European cities. Almost all
asset management centers, except Dublin, are focusing on ESG and alternative asset business.
In Asia, Singapore (+15.9) and Hong Kong (+10.3) saw the most significant increases, while
Tokyo (+0.1) and Shanghai (+1.2) showed smaller gains. Comparing these four cities, in termsof ESG business, Japanese and Chinese companies have made slower progress in ESG
information disclosure and compliance compared to Singapore and Hong Kong. In thealternative asset business, Singapore and Hong Kong are actively exploring blockchain, digitalassets, and other areas, and the development of tokenized securities and digital asset platforms
is creating more opportunities for managing and trading alternative assets. Shanghai and Tokyo
are more conservative, with relatively lower acceptance of alternative assets among investors.

12

2024 Global Asset Management Center Index Report
Figure 1-5 Global Asset Management Center Ranking of ESG Business and Alternative
Assets (2023-2024)

105
100
2024
95

2023

90
85
80
75
70

Growth Rate
By comprehensively comparing the growth rates of the sub-sector indicators such as underlying
assets, asset management institutions, open-end funds, ESG business, and alternative asset
business, it is observed that Chicago ranks first, with Zurich (+8), Hong Kong (+4.3), andBoston (+4.1) showing relatively high comprehensive growth rates. Paris (-3.6), Beijing (-6.1),
and Frankfurt (-4.7) have shown relatively stagnant development. Although Chicago saw
double-digit year-on-year declines in derivative market trading volumes, this was not enoughto completely offset the advantage of Chicago's asset management institutions' AuM and thestrong growth in ESG business. Zurich also performed well in high-net-worth client
management and sustainable investment. Hong Kong's growth mainly benefited from its close
ties with mainland China. Despite facing global economic uncertainty, Hong Kong has achieved
growth in open-end funds and alternative assets by strengthening green finance and its
connection with mainland markets.

13

2024 Global Asset Management Center Index Report

Figure 1-6 Global Asset Management Center Ranking of Growth Rate (2023-2024)

101
2024

99

2023

97
95
93
91
89
87
85

14

2024 Global Asset Management Center Index Report

Appendix: Indicator System
The 2024 Global Asset Management Center Indicator System remains consistent with 2023.
The primary indicators are divided into the demand side, supply side, and business side of asset
management. Secondary indicators measure asset management demand from local funding
pools and overseas capital inflows; asset management supply from institutional openness, talent
reserves, and underlying assets; and asset management business from asset management
institutions, open-end funds, ESG (Environmental, Social, and Governance) business, andalternative assets. The tertiary indicators, totaling 53, reflect specific information from theabove layers and are all quantitative indicators that are regularly updated.
Figure 1-7 Global Asset Management Center Evaluation System

Asset Mangement Center

Alternative Asset

ESG
Business

Asset Manager

Underlying Assets

Talent Reserve

Open-end FundBusiness Side

Supply Side

Institutional
Opening-up

Overseas Capital
Inflow

Domestic Capital
Pool

Demand SideIt should be noted that compared to 2023, the indicators and weight assignments in this report
have been further optimized and refined. First, the tertiary indicators "IPO Quantity" and "IPO
Growth Rate," which are flow concepts, have been removed to balance the evaluation of stockand bond markets. Second, the weight of indicators that change less frequently each year,
namely "Institutional Openness and Talent Reserves," has been reduced from 15% to 10%. In
line with global asset management trends, the weight of "ESG and Alternative Assets" has been
increased to 15%.

15

2024 Global Asset Management Center Index Report

Table 1-3 Weights of Tier 2 Indicators (2023-2024)

Weights%
Tier 1

Tier 2

2024

2023

ChangeCapital supply

15

10

+5

Institutional
openness, talent
reserve

10

15

-5

Underlying assets

25

25

0

Asset managers,
open-end fund

25

30

-5

ESG business,alternative asset

15

10

+5

Growth rate

10

10

0

100%

100

100

Demandand Supply（50%）

Business（50%）

Total

.

16

2024 Global Asset Management Center Index Report
Table 1-4 Global Asset Management Center Evaluation Indicator System (2024)

Tier 1

Tier 2

Domestic
CapitalDemandPool

Tier 3

SourceTotal deposit

CEIC

Insurance premium

SIGMA

Private pension funds

OECD
Monetary

Foreign reserveauthorities

Sovereign wealth funds
Public pension funds
Overseas
Capital

SWF
Federal Reserve

Balance of payments: Financial account

Inflow

Bank of St.
Louis

FDI restrictiveness-FinanceInstitutional

FDI restrictiveness-Commerce

Opening

Statutory corporate income tax rate
Capital gains tax rate

OECD

KPMG

Individual income tax rate
TalentNumber of employees in financial industry

Reserve

Number of employees in the financial
industry/number of employees in non-agricultureLong-term government bond yield (10 years)
Returns of major stock indexes (1 year)

SupplyBureau ofcities/regions

BLOOMBERG

Number of listed stocks
Growth rate of number of listed stocks
Number of listed bonds
Underlying
AssetsGrowth rate of number of listed bonds
Stock market capitalization
Growth rate of stock market capitalization
Bond market balance
Growth rate of bond market balance
Turnover of futures and options
Growth rate of turnover of futures and options

17

WFE

2024 Global Asset Management Center Index Report

Table 1-4 Global Asset Management Center Evaluation Indicator System (2024)(Continued)

Tier 1

Tier 2Tier 3

SourceAuM of top 5 asset managers with local
headquarters
Growth rate of AuM of top 5 asset managers withAsset

local headquarters

Asset

Managers

Number of local headquarters of the top 50 global

managers

asset managers
Number of local branches of the top 50 global
asset managers
Total net assets of open-end funds
Growth rate of total net assets of open-end funds
Net sales of open-end funds
Number of open-end funds
Open-ended

Growth rate of number of open-end funds

IIFA/Related

Funds

Total net assets of ETFs

exchanges

Growth rate of total net assets of ETFs
Net sales of ETFs
Business

Number of ETFs
Growth rate of number of ETFs
Number of ESG index
Growth rate of number of ESG index
Number of ESG ETF
ESG Business

Growth rate of number of ESG ETF

RelatedNumber of ESG Derivatives

exchanges

Growth rate of number of ESG Derivatives
Number of ESG bond
Growth rate of number of ESG bondNumber of alternative asset funds
Growth rate of number of alternative investments
Alternative

Total net assets of alternative investment

IIFA/Related

Asset

Growth rate of total net assets of alternative

exchanges

investment
Total net sale of alternative investment18

2024 Global Asset Management Center Index Report

PART 2 ANALYSIS OF KEY INDICATORS
Demand Side⚫

Financial Account Balance. Since July 2023, the Federal Reserve has paused interest rate
hikes and maintained the federal benchmark interest rate at a high level of 5.25%-5.50%.
As U.S. inflation levels gradually decrease, expectations of rate cuts have risen, resulting
in a decrease in capital inflows compared to the same period last year. As of the first quarterof 2024, the U.S. non-reserve financial account surplus was $179.1 billion. Meanwhile,
Germany, Japan, and China all experienced significant financial account deficits.

Figure 2-1 Balance of Payments: Financial Account (mn＄, 2023-2024)

2023Q1
35000030000025000020000015000010000050000
0-50000-100000-150000

1791242024Q1171800-31000Note: This data is in the scope of nation or region. So, it is represented with the main asset
management center in certain country or region.
Source: Federal Reserve Bank of St. Louis19

2024 Global Asset Management Center Index Report

Topic 1: Asset Allocation Characteristics of Sovereign WealthFunds (SWFs)
Sovereign Wealth Funds (SWFs) are investment entities established and managed bygovernments to handle state-owned financial assets, with professional fund managers hired asstate funds under the law. Since the establishment of the world's first SWF in Kuwait in 1953,
SWFs have evolved from simple government reserves into complex investment institutions,becoming a significant force in the global financial system. In 2023, over 100 SWFs managed
assets totaling $11.3 trillion, nearly ten times the amount in 2000; 40% of these assets comefrom the Middle East, 37% from Asia, and 16% from Europe.
Figure 2-2 Top 10 Global Sovereign Wealth Funds and Their Asset Management
Scale (2023)(Unit: $ billion)

Source: Globalswf

To serve government strategic objectives, SWFs need to hold diversified investment portfolios
across different industries and regions to balance risk and return in volatile markets. In recent
years, SWFs’ asset allocations have generally shifted from traditional assets (stocks, bonds) toalternative assets (real estate, private equity, infrastructure) and from traditional markets toemerging markets.
On one hand, geographic diversification with focused investments**: In the context of global
investment strategies, SWFs still need to make regional allocations based on their own strengths,
risk preferences, and strategic goals. For example, Norway's Government Pension Fund has
deeper investment layouts in European markets, particularly in Nordic countries; the Kuwait
Investment Authority traditionally has a significant investment share in U.S. and European
20

2024 Global Asset Management Center Index Reportmarkets, with a notable increase in investments in the Asian market, especially in China, inrecent years; Singapore's Temasek Holdings focuses on the Asian market, particularly Southeast
Asian countries.
On the other hand, industry diversification with specialization**: Norway's Government
Pension Fund particularly emphasizes renewable energy and sustainability projects; Saudi
Arabia’s Public Investment Fund (PIF) is prominent in technology and innovation sectors; Abu
Dhabi’s Mubadala Investment Company and Kuwait Investment Authority have significant
investments in semiconductor manufacturing and education and healthcare sectors, respectively;
Singapore’s Temasek Holdings is particularly focused on investments in biotechnology andmedical technology companies.
In recent years, Middle Eastern SWFs have shown significant trends and characteristics in theirglobal capital market allocations:Firstly, large asset management scale. Due to geopolitical conflicts, high inflation, and risinginterest rates, Middle Eastern SWFs have received large capital inflows, with asset management
scales continuing to climb, second only to Asia globally. As of November 2023, the top 15
SWFs in the Middle East managed assets worth $4.3 trillion, accounting for nearly 40% of
global SWF assets. Five of these were among the most active SWFs in 2022, including the Abu
Dhabi Investment Authority (ADIA), Saudi Arabia's Public Investment Fund (PIF), MubadalaInvestment Company, and Qatar Investment Authority (QIA).
Secondly, high proportion of investment in alternative assets. Middle Eastern SWFs, due tohaving fewer short-term and medium-term liabilities compared to other types of institutional
investors, have flexibility in making investment decisions, including in non-traditional asset
classes such as real estate, commodities, and hedge funds that can hedge against inflation. Asof the end of 2023, the average allocation of Middle Eastern SWFs to alternative assets
increased from 22% at the end of 2021 to 44%. Mubadala focuses on European assets, while
ADIA concentrates its investments in the North American market and emerging markets. In
terms of investment fields, recent years have seen a focus on emerging technologies andinfrastructure. For example, ADIA and Singapore's Government Investment Corporation (GIC)
jointly invested in projects such as Zendesk, Taibang Biologic, Triveni Turbine, and Climate
Technology.

21

2024 Global Asset Management Center Index Report

Table 2-1 Top 15 Sovereign Wealth Funds in the Middle East (2023)

Proportionof
Alternative
Assets (%)

Country

Name

Year
Established

Assets Under
Management(Billion USD)

Saudi
ArabiaPublic Investment Fund

1971

730

37

NDF

2017

132

100

Investment Corporation of
Dubai

2006

341

65

Abu Dhabi Investment
Authority

1967

984

32

Mubadala Investment Company

1984

276

67

ADQ

2018

199

45

Emirates Investment Authority

2007

91

21

Dubai World

2005

47

100

Dubai Holding

2004

35

93

Kuwait Investment Authority

1953

801

23

Gulf Investment Corporation

1983

3.3

Qatar

Qatar Investment Authority

2005

429

41

Oman

Oman Investment Authority

1980

47

31

Iran

National Development Fund of
Iran

2011

150

79

Bahrain

Bahrain Mumtalakat Holding
Company

2006

18

79

UnitedArab
Emirates

KuwaitTotal

4283.3Weighted Average

42.5

Source: Globalswf

Thirdly, investment in renewable energy surpasses fossil fuels. In 2022, Middle Easternsovereign funds invested $18.7 billion in 51 green transactions, accounting for 29% of global
sovereign wealth fund green investments; in contrast, investments in 11 traditional energy
transactions amounted to $6.7 billion. In 2023, these funds invested $5 billion in climate
technology, three times the $1.8 billion invested in 2022, particularly in solar and wind energy
projects, promoting the development of green hydrogen and low-emission manufacturing.
Lastly, co-investment with emerging markets. On the one hand, there is a more optimistic viewof the development prospects of emerging markets, such as the Qatar Investment Authority’s$400 million investment in infrastructure focused on transportation, communication, andenergy in South Africa; Abu Dhabi and Malaysia's investment cooperation in energy, tourism,
and real estate. On the other hand, shared interests lead to greater collaboration and coordination,
22

2024 Global Asset Management Center Index Reportsuch as the Qatar Investment Authority’s joint venture with Indonesia to invest in natural
resource extraction and tourism in Vietnam.
Figure 2-3 Asset Allocation Categories of Middle Eastern Sovereign Wealth Funds(2020-2023)

120
100

%

80
60
40
20
0
2020
stock

2021

2022

fix income

alternative

2023

Source: GlobalSWF, Invesco

Supply Side⚫

Financial Employment/Non-agriculture Employment. In terms of absolute scale,
Shanghai has as many as 500000 financial employees, ranking among the top in the world.
However, in terms of relative scale, the proportion of financial employees in Shanghai is
3.85%, which is quite different from New York, London and Hong Kong.

23

2024 Global Asset Management Center Index Report

Figure 2-4 Number of Employees in Financial Industry and Proportion to NonAgriculture Employees (10000, %,2023)

Number

Proportion

60
50
40

14%
11.63%

11.40%

7.64%
6.39%
30
5.58%

12%
10%

7.91%
5.50%
4.80%

20

7.00% 8%

5.89%
4.00%

6%

3.85%

1.99%

10

4%
2%

0

0%

Note: The data for some cities is based on the number of employees in the finance and insurance
industries.
Source: Bureau of cities/regions⚫

Average Long-term Government Bond Yield (10-year). Government bond yields inmost of the world's major economies are on a downward trend. The main reason is that
inflation in these economies has been effectively controlled, and the monetary tightening
policy has gradually shifted, prompting the local government bond yields to adjust
accordingly. Since the beginning of this year, Switzerland, the euro area, Canada andUnited Kingdom have entered a cycle of interest rate cuts, and the expectations of interest
rate cuts in other regions have gradually increased. At the same time, the slowdown in
China's economic growth, coupled with the downturn in the stock market and theunexpected interest rate cuts, have increased the demand for bond allocation, prompting
China's government bond yields to continue to decline. As of the first quarter of 2024, theyield on 10-year government bonds in China is 2.15%.

24

2024 Global Asset Management Center Index Report
Figure 2-5 Average Long-term Government Bond Yield（%）

2024Q22023Q2
2.87

Hong Kong
2.15

Shanghai
0.91

Tokyo

2.77

Singapore
Toronto

3.02

Paris

2.98
2.18

Frankfurt
0.38

Zurich

2.94

Luxembourg
London

3.88

New York

3.83
0

0.5

1

1.5

2

2.5

3

3.5

4

Note: This data is at the national/regional level. For the convenience of comparison, we represent thecountry/region with related main asset management centers.
Source: Moody’s Analytics⚫

Returns of Major Stock Indexes. Over the past year, rising interest rate cut expectations,defensive nature and low valuations have contributed to a broad rally in European equities.
Firstly, the expectation of interest rate cuts has risen, inflation in Europe has been brought
under control earlier, and economic growth pressure has prompted European interest rate
cut expectations to heat up and enter the interest rate cut cycle earlier, promoting therecovery of local corporate profits. Secondly, the European stock market is more defensive,and most of the Big 11 European stocks belong to industries such as health care and FMCG,
and strong earnings have supported the rise of the local stock market in the context ofslowing economic growth. Thirdly, the valuation is relatively low, unlike the United States
stock market, which is dominated by growth sectors such as technology, the European
stock market have more traditional industries such as utilities, energy and finance, and therelatively low valuation level makes it more attractive for allocation.

25

2024 Global Asset Management Center Index Report

Figure 2-6 Returns of Major Stock Indexes（12 months, %）2024Q2
Hong Kong
Shanghai
Beijing
Tokyo
Singapore
TorontoParisFrankfurt
ZurichLuxembourg
DublinLondon
New York

2023Q2-14.90-7.33-20.52
7.71

2.38
9.84

-2.27
8.70

3.36
-10.00

38.06
5.87
10.37
-30

-20

-10

0

10

20

30

40

50

Source: BLOOMBERG⚫

Stock Market Capitalization. Catalyzed by the wave of technological revolution, the
New York stock market has seen the largest increase in market capitalization, rising to$53.79 trillion at the end of the second quarter of 2024, an increase of $7.61 trillion overthe same period last year. Meanwhile, the United Kingdom stock market saw the largest
increase in market capitalization, increasing by 46.60% from $3.18 trillion at the end of
the second quarter of 2023 to $4.67 trillion at the end of the second quarter of 2024. In
addition, the market capitalization growth rate of Beijing's stock market is among thehighest in the world, with a year-on-year increase of 15.74%.

26

2024 Global Asset Management Center Index Report
Figure 2-7 Stock Market Capitalization and Growth Rate (tn＄, %)2023Q22024Q2Growth rate

60

50%

50

40%
30%

40

20%

30

10%

20

0%

10

-10%

0

-20%

Source: WFE

Topic 2: Strong Performance of U.S. Technology Stocks
In theory, rising interest rates negatively impact the stock market because increased corporate
financing costs lead to reduced consumption and investment, which in turn affects corporate
profitability. Sectors like technology and high-growth fields are more vulnerable to this adverse
impact. However, market reactions also depend on various factors, including economic growth
expectations, corporate profitability, and investor expectations for future inflation and interest
rate trends. For example, the higher rate hikes by the Federal Reserve compared to othermarkets' returns attracted global capital inflows into U.S. stocks. Simultaneously, the leadershipof U.S. high-tech companies in the global market led investors to focus on the long-term growthpotential of these companies, overlooking the losses from rising interest rates. At the end of2023, the market capitalizations of seven major U.S. technology companies—Apple, Microsoft,
Amazon, NVIDIA, Google, Meta, and Tesla—rose by 45%, 56%, 85%, 234%, 55%, 185%, and110%, respectively, compared to the end of 2022, collectively increasing by $5.2 trillion. This
contributed to over 66% of the S&P 500 index's gains and also boosted the annual growth ratesof the Dow Jones Industrial Average and the S&P 500 index to 11% and 16%, respectively,enhancing the resilience and attractiveness of the U.S. stock market.
In early 2024, as the Federal Reserve's monetary policy stabilized, market expectations for theend of the rate hike cycle strengthened. In this context, technology stocks showed stronger
momentum, benefiting from continued investments in AI technology and increased demand forenterprise cloud services, while the semiconductor sector also performed well due to the gradual272024 Global Asset Management Center Index Report
recovery of global supply chains. As the U.S. presidential election approached, the technology
industry faced more policy uncertainty, with Congress intensifying antitrust investigations
against large technology companies, particularly in the social media and e-commerce sectors.
This regulatory pressure caused some technology stocks to face selling pressure during thequarter. Nonetheless, some technology companies mitigated part of this pressure by expanding
business areas and launching innovative products. For example, Tesla made breakthroughs inautonomous driving technology, driving its stock price higher despite adjustments in othertechnology stocks. Overall, technology stocks experienced significant volatility in the second
quarter, with weakened growth momentum.
In the second half of 2024, due to disappointing mid-year financial reports from tech giants andconcerns about a hard landing for the U.S. economy triggered by weak employment data and
PMI figures, global markets entered a panic sell-off, with significant outflows of funds fromtech stocks that had seen substantial gains earlier. The NASDAQ fell by 10% in July, and the
STOXX 600 technology sector in Europe dropped by over 6% in the first week of August.
Figure 2-8 NASDAQ 100 Index（2023-2024）

22,00020,00018,00016,00014,00012,0002023-01-03
2023-01-25
2023-02-15
2023-03-09
2023-03-30
2023-04-21
2023-05-12
2023-06-05
2023-06-27
2023-07-19
2023-08-09
2023-08-30
2023-09-21
2023-10-12
2023-11-02
2023-11-24
2023-12-15
2024-01-09
2024-01-31
2024-02-22
2024-03-14
2024-04-05
2024-04-26
2024-05-17
2024-06-10
2024-07-02
2024-07-24

10,000Source：wind

However, the overall market sentiment remains optimistic about long-term technologicalinnovation. In the global asset management industry, many asset management giants haveinvested in U.S. technology stocks through various funds and ETF products, covering a wide
range of companies from large tech giants to emerging tech firms, particularly in cutting-edge
fields such as quantum computing and biotechnology. These products have typically attracted
funds from a wide array of global investors, becoming significant players in the tech stock
market.

28

2024 Global Asset Management Center Index Report
Table 2-2 One-Year Returns of Major Asset Management Products Investing in U.S.
Technology Stocks (2024)

INVEST PRODUCTS

1 YEARYIELD %（TO2024/8/20）

iShares U.S. Technology ETF (IYW)

22.34

iShares Expanded Tech-Software
Sector ETF (IGV)

6.62

Vanguard Total Stock Market Index
Fund

17.07

SPDR S&P 500 ETF Trust (SPY)18.49

Technology Select Sector SPDR Fund
(XLK)

17.32

Fidelity Contrafund

16

Fidelity Select Technology Portfolio(FSPTX)

29

Morgan Stanley
Investment Management

Morgan Stanley Insight Fund

40

Allianz Global Investors

Allianz Technology Trust

23.7

Invesco QQQ Trust (QQQ)

17.87

Invesco S&P 500 Equal Weight
Technology ETF (RYT)

13.48

ASSET MANAGERS

BlackRock

Vanguard
State Street Global
Advisors

Fidelity Investments

InvescoSource: BLOOMBERG⚫

Turnover of Futures and Options. Chicago has the largest turnover of futures and options,at $1011 trillion. Turnover of futures and options in London is the fastest-growing one,with a year-on-year increase of 17.55% to $276.50 trillion at the end of the second quarterof 2024. At the same time, the turnover of futures and options in Shanghai increases
slightly, reaching $23.93 trillion at the end of the second quarter of 2024, up 0.71% yearon-year.

292024 Global Asset Management Center Index Report

Figure 2-9 Turnover of Futures and Options (tn＄)

2023Q2
1600
1400
1200
1000
800
600
400
200
0

2024Q2Growth rate20%
10%

1,011.00

0%
-10%
-20%
276.50

7.78

72.63

3.07

6.95

23.93

4.98

-30%
-40%

Source: WFE

Business Side⚫

AuM of Asset Managers. The scale of the world's leading asset managers continued to
expand. As of the end of June 2024, the AuM of top five asset managers headquartered in
New York was US$21.05 trillion, a year-on-year increase of 12.39%. The size of the top 5
asset management institutions headquartered in Shanghai was 1.8 trillion US dollars, a
year-on-year increase of 12.50%, the growth rate was at a medium level.

30

2024 Global Asset Management Center Index Report
Figure 2-10 AuM and Growth Rate of Top 5 Asset Managers with Local Headquarters(tn＄, %)

2023Q22024Q2Growth rate

25

50%
21.05

20

40%

15 12.62

30%

10

7.68
5.29

5

3.64 4.36

6.83

20%
5.43
3.06

2.99
0.64

0.198 0.1
0

2 1.8

10%
0.26
0%

Source: Asset managers

Topic 3: AuM of Asset Managers Expanded Significantly
The impact of global geopolitical conflicts has gradually subsided, the effectiveness of inflation
governance in various countries has gradually emerged, and the trend of monetary policy shift
has become increasingly clear since 2024. In this context, the opportunities and challenges
faced by asset managers have become increasingly clear, the allocation strategy has beenadjusted accordingly, and the scale of management has increased significantly. As of the end ofJune 2024, the world's top 10 asset managers are all in the expansion stage, with an overall
scale of US$49.18 trillion, a year-on-year increase of 15.61%. Among them, Vanguard Group's
assets under management increased the most, increasing by 2.1 trillion US dollars over the same
period last year, a year-on-year increase of 29.17%.

31

2024 Global Asset Management Center Index Report

Table 2-3 Changes in the AuM of the world's top 10 asset managers (2023-2024)
2024Q2

Sort by AuM in 2024 Q2

2023Q2

AuM (trillion US dollars)

Year-on-year

1Black Rock

10.65

9.43

12.94%

2
3
4
5
6

Vanguard GroupUBS
Fidelity Investment
State Street
JPMorgan

9.30
5.87
5.50
4.42
3.70

7.20
5.53
4.50
3.80
3.20

29.17%
6.15%
22.22%
16.32%
15.63%

7

Goldman Sachs

2.93

2.71

8.12%

8
9
10

Capital Group
Credit Agricole-Amundi SA
Bank of New York Mellon

2.60
2.16
2.05

2.30
1.96
1.91

13.04%
10.20%
7.33%

49.18

42.54

15.61%

Total

Note: Since the second quarter of 2023, UBS Invested Assets includes the investment assets of associatesof the Asset Management Business Unit, and the relevant data has been restated.
Data source: Official websites of asset managers

BlackRock, the world's largest asset manager, has expanded significantly against the backdrop ofheightened uncertainty. As of the second quarter of 2024, BlackRock's assets under management
reached $10.65 trillion, an increase of $1.22 trillion or 12.94% year-on-year over the same period
last year. In the first half of 2024, BlackRock had a net flow of more than $140 billion, including a
net flow of $81.565 billion in the second quarter.

32

2024 Global Asset Management Center Index Report
Figure 2-11 BlackRock AuM size and structural changes (2023-2024, trillion USD)

EquityFixed Income

Multi-asset

Alternatives

Cash management

12

10

9.43

0.87

0.15

EquityFixedIncome

0.11

0.03

0.07

10.65

Cash
management

2024Q2

1.22

8
6
4

2
0
2023Q2Multi-asset Alternatives

Source: BlackRock

The expansion of BlackRock's asset management scale is mainly due to a variety of factors, such as
economic resilience, policy expectations and product innovation. Firstly, economic resilience andtechnological revolution have driven the stock market up, helping to expand the AuM of stock
products. The United States economy is resilient, with real GDP seasonally adjusted annualized rateof 2.8% in the second quarter of 2024 at, higher than the previous value of 1.4% and market
expectations of 2%. At the same time, the in-depth development of the scientific and technologicalrevolution has triggered a market investment boom, which jointly promotes the rise of the stock
market. Between the third quarter of 2023 and the second quarter of 2024, the S&P 500 rose 22.70%,
prompting BlackRock to increase the size of its equity-related products by $0.87 trillion to $5.83
trillion.

33

2024 Global Asset Management Center Index Report

Figure 2-12 S&P 500 Index and Aum of BlackRock Equity Product (2023-2024, trillion USD)

S&P 500

AuM of Equity

trillion ＄

6000

7

5000

6
5

4000

4
3000
3

2000

2

1000
0
2023/6/30

12023/9/30

2023/12/31

2024/3/31

02024/6/30

Note: The left axis is the S&P 500 index, and the right axis is the BlackRock stock product size.
Source: S&P Global, BlackRock

Secondly, the expectation of interest rate cut of Federal Reserve has increased and driven the net
flow of fixed income products to continue to expand. As the effectiveness of inflation control
gradually emerges, the Fed has slowed down the frequency of interest rate hikes and decreased themagnitude. In July 2023, the Fed raised the cap on the federal funds rate to 5.5% by 25 basis points,
after which rate hikes were paused and kept higher for longer. Over time, interest rate cut
expectations have gradually increased, especially after the United States CPI fell for four
consecutive months in July 2024 and returned to below 3%. Rising expectations of interest rate cut
have led to higher prices in fixed income assets, prompting flows into fixed income products toreturn to the expansion cycle, making them the asset class with the largest net inflows in the past
three quarters. In the second quarter of 2024, BlackRock's net inflow of various products reached
US$81.565 billion, of which the net inflow of fixed income products was US$35.409 billion,
accounting for 43.41%.

34

2024 Global Asset Management Center Index Report
Figure 2-13 Fed Funds Rate and BlackRock Net Flows of Various Products (2022-2024,
trillion USD, %)EquityFixed Income

Multi-asset

Alternatives

Cash management

Fed Fund Rate

2000
1500
1000
500
0
-500
-1000

2022Q3 2022Q4 2023Q1 2023Q2 2023Q3 2023Q4 2024Q1 2024Q2

Note: The federal funds rate here refers to the upper end of the target range, which is the right axis
in the chart and the left axis is the net flow.
Source: Federal Reserve Bank of St. Louis, BlackRock

Thirdly, the strong inflow of funds into ETF products has supported the expansion of BlackRock’s
AuM. Under the influence of favorable factors such as strong macroeconomic resilience, relatively
low stock market volatility and high bond yields, the inflow of ETF products continued to increase.
In the first quarter of 2023, the net inflow of BlackRock ETF was only US$21.705 billion, and in
the second quarter of 2024, the net inflow of ETFs has increased to US$83.141 billion, accountingfor 101.93% of the total net inflow, making most contributions to the growth of the overall AuM. At
the beginning of 2024, BlackRock launched the iShares Bitcoin Trust (IBIT), which has a net worthof $20.543 billion as of August 14, attracting a large amount of capital inflows.

35

2024 Global Asset Management Center Index Report

Figure 2-14 Net Flows and Proportion of BlackRock ETF (2023-2024, USD 2024)

net flow of ETF

proportion of net flow of ETF

1000

120%

900
100%

800
700

80%

600
500

60%

400
40%

300
200

20%

100
0

0%
2023Q12023Q22023Q32023Q42024Q12024Q2

Note: The proportion of ETFs in the third quarter of 2023 is affected by extreme values and issmoothed here. The left axis is the net flow of BlackRock ETF, and the right axis is the proportion of
the net flow.
Source: BlackRock⚫

Net Sales of Open-end Funds. The size of global open-end funds has generally increased, andnet sales have also increased. New York had strong net inflows, with net inflows reaching $708
billion in the fourth quarter of 2023, a significant increase from the beginning of the year.
Beijing and Shanghai have the world's highest net fund sales, with US$120 billion and US$108
billion, respectively.

36

2024 Global Asset Management Center Index Report
Figure 2-15 Net Sales of Open-end Funds (bn＄)

2023Q1
800
700
600
500
400
300
200
100
0
-100
-200

2023Q4

708

183
36
-28

101

16

23

84

120 1081

4-74

Note: Data for 2024Q1 has not yet been released so data for the 2023Q4 is used here.
Source: IIFA⚫

Net Assets and Growth of ETFs. The scale of passive investment is relatively stableagainst the backdrop of economic uncertainty. As of the fourth quarter of 2023, the net
asset size of New York ETFs was $6.47 trillion, decreasing 8.16% year-on-year. Although
net asset of Zurich is smaller, it has the fastest growth rate, with an increase of 190.86% at
the end of 2023 compared with the beginning of the year. Shanghai's growth rate is slower,with ETF net assets of $193.1 billion at the end of 2023, an increase of 1.06% from the
beginning of the year.

372024 Global Asset Management Center Index Report

Figure 2-16 Total Net Assets and Growth Rate of ETF (bn＄, %)2023Q12023Q4Growth rate

7000

250%

6000

200%

5000

150%

4000
100%
3000
50%

2000

0%

1000
0

-50%

Note: Metrics of Shanghai are calculated based on IIFA and Shanghai Stock Exchange data.
Source: IIFA⚫

Net Sales of ETFs. Global ETF net inflows tend to accelerate. As of the fourth quarter of2023, New York ETFs saw the largest increase in the world with net inflows of $473.1
billion. Meanwhile, London and Dublin saw net ETF inflows of $230.1 billion and $150.9
billion. At the same time, the net inflow of ETFs in Shanghai in 2023 was about US$58.69
billion, ranking among the top in the world in terms of scale and growth.

38

2024 Global Asset Management Center Index Report
Figure 2-17 Net Sales of ETF (bn＄)

2023Q12023Q4

500
400
300
200
100
0
-100

Source: IIFA⚫

Number of ESG Products. ESG development presents a polarization trend. As thebirthplace of ESG concepts, Europe still leads the world in the number of ESG products.
As of June 2024, Luxembourg was the asset management center with the largest numberof ESG products in the world, with a total of 2311 ESG-related products. As of June 2024,
there were 635 ESG bonds, 31 ESG ETFs, and 108 ESG indices in Shanghai, with the total
number of ESG products increasing by 21.89% over the same period last year. In addition,
the cost of ESG investment and the conflict of interest made it cold in United States. In
March 2024, Bank of United States, Citibank, Wells Fargo and JPMorgan Chase withdrew
from the Equator Principles, after which State Street, Pacific Investments and Goldman
Sachs withdrew from the Climate Action 100+ initiative.

39

2024 Global Asset Management Center Index Report

Figure 2-18 Number of ESG Products

ESG Bond

ESG ETF

ESG Index

ESG Derivative

2500
2000
1500
1000

500
0

Source: Exchanges⚫

Net Assets and Growth Rates of Alternative Investment. Alternative investments havemade great strides by virtue of advantages of diversification, resilience and yieldenhancement. Europe's major asset management centers have a large net of alternative
investments and are seeing rapid growth in 2023. Among them, the net assets of alternative
investments in Paris at the end of the fourth quarter of 2023 were reported to be 992.02
billion US dollars with a growth rate of 8.90%. Although the scale of alternative
investment in Shanghai is small, the growth rate of 28.96% is among the highest in theworld. In addition, Hong Kong's alternative assets have the highest growth rate among theworld's major asset management centers, with a growth rate of 51.10% at the end of 2023.

40

2024 Global Asset Management Center Index Report
Figure 2-19 Total Net Assets and Growth Rate of Alternative Investment (bn＄, %)2023Q12023Q41200

Growth rate
60%
50%
40%
30%
20%
10%
0%
-10%
-20%

1000
800
600
400
200
0

Source: IIFA

41

2024 Global Asset Management Center Index Report

PART 3 ANALYSIS OF REGIONAL CHARACTERISTICS
EuropeAfter inflation was brought under control, many European countries began to shift theirmonetary policies. Subsequent intensive interest rate cuts brought opportunity to European
fixed income. At the same time, the development of financial technology has a profound impact
on the asset management industry. United Kingdom is committed to applying distributed ledger
technology to empower the development of the fund industry and realize fund tokenization.
With its advantages in markets, taxes, tools and channels, Luxembourg has attracted funds fromall over the world and has become the world's leading cross-border fund domicile.

European interest rate cut brings certain opportunities
On June 6, 2024, the European Central Bank (ECB) decided to lower the three key interest rates
by 25 basis points, marking the beginning of a downward interest rate cycle in Europe. Since
July 2022, the ECB has raised interest rates ten times, with a total of 450 basis points in the key
rates. After September 2023, Euro area maintained high interest rates for a long time, and theinflation rate fell by more than 2.5 percentage points, and the inflation outlook would improvesignificantly. Against the backdrop of continued weakening price pressures and a broad decline
in inflation expectations, the ECB began to shift its monetary policy, with interest rates on
deposit facility, main refinancing operations and marginal lending facility falling to 3.75%, 4.25%
and 4.5% respectively.
The easing of global inflation has prompted many countries to enter the window of interest rateadjustment, especially in Europe. Since 2024, many developed countries around the world haveadjusted their benchmark interest rates, among which Israel was the first to cut interest rates,
lowering interest rates by 25 basis points on January 1, 2024. In addition, Hungary has the mostfrequent and the largest depth of interest rate cuts, with a total of 6 rate cuts in the first half of2024 and a 375 basis point cuts in the benchmark rate. In the first half of 2024, a total of fivecountries or regions in Europe have lowered their benchmark interest rates 14 times, which will
have a greater impact on local financial markets and asset managers.

422024 Global Asset Management Center Index Report
Table 3-1 Timeline and depth of interest rate cuts by central banks in developed
countries (bps, 2024)

Country

Date

Interest rate
before the cut

Interest rate
after the cut

Depth of thecutIsraelJanuary 1

4.75%

4.50%

25

Hungary

January 31

10.75%

10.00%

75

Czech Republic

February 8

6.75%

6.25%

50

Hungary

February 28

10.00%

9.00%

100

Czech Republic

March 20

6.25%

5.75%

50

Switzerland

March 21

1.75%

1.50%

25

Hungary

March 27

9.00%

8.25%

75

Hungary

April 24

8.25%

7.75%

50

Czech Republic

May 2

5.75%

5.25%

50

Sweden

May 8

4.00%

3.75%

25

Hungary

May 22

7.75%

7.25%

50

CanadaJune 5

5.00%

4.75%

25

EurozoneJune 6

4.00%

3.75%

25

Hungary

June 19

7.25%

7.00%

25

Switzerland

June 20

1.50%

1.25%

25

Czech Republic

June 27

5.25%

4.75%

50

United Kingdom

July 31

5.25%

5.00%

25

Note: As of July 31, 2024.
Source: European Central Bank, Bank of England, Swiss National Bank, Czech National Bank,
Sveriges Riksbank, Magyar Nemzeti Bank, Bank of Canada, Bank of Israel

Intensive interest rate cuts in Europe provide certainty for fixed income products. Since thesecond half of 2023, many countries around the world have stabilized at a high level of interest
rates. Recently intensive cuts of interest rates in many European countries indicate that thetightening cycle has peaked, and interest rates have begun to enter a downward cycle. The
European Central Bank's interest rate cut in early June led to a significant decline in Euro Area
10-year government bond yield, and opportunities in the sovereign debt market are gradually
opening up. At the same time, the peak in yields is a good opportunity to lock in higher bondyields.

43

2024 Global Asset Management Center Index Report

Figure 3-1 ECB Key Rate and Euro Area Government Bond Yields (%, 2020-2024)

yield of Euro Area 10-year government bondinterest rate on deposit facility
interest on main refinancing operations
interest rate on marginal lending facility

6
5
4
3
2
1
0
-1
-2
2020/1/1

2021/1/1

2022/1/1

2023/1/1

2024/1/1

Source: European Central BankAt the same time, the narrowing of global corporate bond spreads has provided a significant
premium for European high-yield bonds. Over the past few quarters, global corporate bondspreads have narrowed sharply as fears of a hard landing have receded, but there have beendifferences between regions. After months of continuous narrowing, United States corporatebond spreads have become relatively small, with United States investment grade and high-yieldspreads of 88 basis points and 338 basis points, respectively, and the holding risk is not far from
United States Treasuries. In contrast, spreads for European investment grade and high yieldbonds are 108 basis points and 351 basis points, respectively, which is a significant gap from
historical lows. After taking into account the duration and rating of the index, European highyield bonds offer a higher premium. Schroder allocated bonds before the start of the interest
rate cut cycle, slightly increased its holdings of European corporate bonds, and took a neutral
stance on United States corporate bonds, of which investment-grade bonds accounted for 26%
and high-yield bonds accounted for 10%.

442024 Global Asset Management Center Index Report
Table 3-2 Comparison of Yield Spreads Between High-yield Bonds in Europe and America(bps, 2024)

Adjusted

Index

Credit spread

RatingDuration

United Kingdom High Yield Bonds

442

BB-

3.45

478

European high-yield bonds

349

BB-

3.61

381

United States high-yield bonds

338

B+

4.85

273

spreadNote: As of June 2024.
Source: ICE Indices, TwentyFour

UK fund tokenization and distributed ledger technology
The United Kingdom is the world's leading and Europe's largest asset management center.
According to the annual review statistics of the European Fund and Asset Management
Association, the total AuM in Europe in 2023 was 27.77 trillion euros, of which 9.92 trillion
euros was under management in United Kingdom, accounting for 35.7% of the total size ofEurope, roughly the same as the next closest France, Germany and Switzerland combined. At
the same time, overseas client assets accounted for 48%, the number of overseas asset managers
accounted for 60%, global investment accounted for 78%, and asset management service
exports accounted for 5.5% of United Kingdom's total net exports. Ongoing geopoliticalconflicts, increased economic uncertainty and severe financial market volatility have led to a
decline in United Kingdom AuM.

45

2024 Global Asset Management Center Index Report

Figure 3-2 Europe AuM and UK share (EUR trillion, 2017-2023)

United Kingdom

FranceGermany

Switzerland

Netherlands

Italy

Others

Proportion of UK

35

40%

30

35%
30%

25

25%

20

20%
15

15%

10

10%

5

5%

0

0%
2017

2018

2019

2020

2021

2022

2023

Source: European Fund and Asset Management Association

The United Kingdom is committed to making a positive impact on the asset management
industry through the application of advanced technology. To this end, the HM Treasury and the
Financial Conduct Authority (FCA) are working closely together to plan to introduce fintech tothe asset management industry in three phases. Firstly, by building a fund tokenization blueprint,
distributed ledger technology was introduced to United Kingdom fund companies. Secondly,
explore and deepen the tokenization of funds and realize investment funds 3.0 throughcooperation. Finally, while the key projects of fund tokenization are implemented, the potential
opportunities of artificial intelligence and other technologies for the asset management industry
will be focused.①

The fund tokenization is led by the Science and Technology Working Group, which studies the impact oftechnology on the United Kingdom investment management sector. The Working Group was established under the
auspices of the Government Asset Management Working Group and is supported by the Investment Association of
the United Kingdom. For details, please refer to the following website:
https://www.gov.uk/government/news/technology-working-group-publish-second-fund-tokenisation-report.
①

46

2024 Global Asset Management Center Index Report
The United Kingdom's promotion of fund tokenization is mainly to improve the efficiency ofinvestment funds. Specifically, firstly, fund tokenization can provide a real-time shared recordkeeping system, simplify books and record procedures, and reduce fund management costs.
Secondly, optimize settlement capabilities and speed up settlement, provide greater flexibility
for the fund and reduce the credit and operational risks associated with liquidity. Thirdly,
automate processes through smart contracts to facilitate fund distribution, improve the qualityof disclosure, and facilitate regulatory oversight. Fourthly, tokens are highly transferable,
allowing for better access to market liquidity when used as collateral.
The financial industry has made significant progress in tokenization. Research shows that $16
trillion in assets will be tokenized in 2030, accounting for about 10% of global GDP. According
to the Annual Report on Fund Services 2023, more than half of the fund managers surveyed
will offer tokenized fund products within one year. At the same time, 37% of asset managers
expect to provide tokenized fund products within three years, while only 2% have no plan tocarry out fund tokenization. ① It can be seen that fund tokenization is no longer at theconceptual stage but has gradually become an emerging reality. The fund tokenization is not
driven by trends alone, but by the advantages of distributed ledger technology in enhancing
transparency, efficiency, and security.
Figure 3-3 Expected timeline for the supply of tokenized products

Asset managers

Asset servicers

60%
50%
40%
30%
20%
10%
0%
Within 12 months

Within 3 years

Within 5 years

Have no plan

Source: Calastone

The data comes from the Fund Services Annual 2023 co-authored by Calastone and Global Custodian, with theUnited Kingdom accounting for the highest proportion of respondents.
①

47

2024 Global Asset Management Center Index Report

Luxembourg attracts global cross-border fund registration
Luxembourg has become the largest investment fund center in Europe due to its political,
economic and social stability, its proximity to 500 million European investors and its
geographical location in the heart of Europe. By the end of 2023, there were 3274 investment
funds registered in Luxembourg, with net assets under management of 5.29 trillion euros. In
recent years, the slow decline in the number of fund registrations and the continuous increasein the scale of funds under management have coexisted, reflecting the gradual deepening of thehead-taking trend of the Luxembourg fund industry, and the intensification of competition has
contributed to the survival of the fittest among fund companies in the region.
Figure 3-4 Luxembourg fund count and AuM (billion euros, 2004-2023)

Net assets under management

Number of funds

7000
6000
5000
4000

3000
2000
1000

2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023

0

Source: CSSF, ALFILuxembourg is the world's largest domicile of cross-border funds, attracting fund companies
from all over the world. At the end of 2023, the United States, United Kingdom, Germany,
Switzerland and France were the largest sources of cross-border funds in Luxembourg,
accounting for 75.3% of total net assets. In terms of the number of cross-border fundregistrations, Germany is the largest source of cross-border funds in Luxembourg, accounting
for 32% of the total number of cross-border fund registrations.

48

2024 Global Asset Management Center Index Report
Figure 3-5 Distribution of Originator Sources for Funds Domiciled in Luxembourg (2023)

Net assets

Funds

35%
30%
25%
20%

15%
10%
5%
0%
US

GB

DE

CH

FR

IT

BE

LU

NL

DK Others

Source: CSSF, ALFILuxembourg accounts for a large share of the global distribution of cross-border funds. In 2023,
the total number of cross-border funds in the world is 14725, and the total number ofregistrations for cross-border distribution is 140635. Luxembourg dominates the distribution ofcross-border funds in the world, with 76718 registrations and a market share of 54.6%. In
addition, Ireland registered 51228 cross-border fund distributions, with a market share of 36.4%.
Luxembourg and Ireland account for most of the global distribution of cross-border funds, withother countries having relatively little cross-border fund distribution.

49

2024 Global Asset Management Center Index Report

Figure 3-6 Number of Global Cross-border Funds and Cross-border Distribution
Registrations (2013-2023)

Luxembourg

IrelandFranceJerseyUnited Kingdom

Germany

United States

Liechtensteinotherscross-border funds
14607 14725

16000

138467140635
11222 11732
128520132776
1214589869 10430
11349510353191027 96548
83505
76500

14000

160000140000120000100000
80000

12607

13669 14031 14128 14201

12000
10000
8000

60000

6000

40000

4000

20000

2000

0

0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Note: The left axis is the number of cross-border fund distribution registrations, and the rightaxis is the actual number of cross-border funds.
Source: PwC Global AWM & ESG Market Research Centre analysis, Lipper, ALFILuxembourg's attractiveness to global cross-border funds stems mainly from the market
passport, tax regime, richness of fund instruments and breadth of distribution channels.
Specifically, the first is that the EU market passport provides a huge market size and convenient
operational procedures, and authorized fund managers can manage and market fund products
in different EU countries. Secondly, the tax system reduces the tax burden on investors andfund companies, Luxembourg has an extensive network of tax treaties, fund products are
exempt from income tax, and qualified management fees are exempt from VAT. Luxembourg
provides fund managers with various tools that greatly enhance the convenience and flexibilityof structuring strategic portfolios, including Undertaking for Collective Investment inTransferable Securities (UCITS), Venture Capital Investment Companies (SICARs),
Specialized Investment Funds (SIFs) and Reserved Alternative Investment Funds (RAIF).
Fourthly, the breadth of distribution channels, Luxembourg has built an efficient global
distribution channel with an in-depth understanding of the legal, technical, operational andcultural aspects of the global asset management industry, In 2023, Luxembourg widelydistributed cross-border funds in 81 countries around the world.

North America
The sustainable development of the asset management industry is inseparable from theempowerment of financial technology. North America, as the world's largest asset management502024 Global Asset Management Center Index Reportcluster, is at the forefront of the application of financial technology. United States empowers
the development of the asset management industry through artificial intelligence, which
improves the efficiency of the value chain. Canada is more inclined to deploy cloud computing
and blockchain and enhance the initiative of investment strategies through technology and othermeans.

AI empowers the United States asset management industry to improve
efficiency
With the rapid development and increasing popularity of fintech, emerging technologies suchas artificial intelligence are gradually changing the direction and pace of the asset management
industry. The application of AI in asset management can help reduce costs, generate alpha,improve operational efficiency, improve product and distribution, and aid risk management.
According to the Boston Consulting Group's research data, asset management institutions canachieve efficiency improvement and cost reduction through AI empowerment in all aspects ofthe value chain, reducing the cost of asset management institutions by 5% to 15% at this stage.
Among them, AI has the strongest role in improving efficiency in investment management andtransaction execution, as well as in sales.
Figure 3-7 AI-empowered asset management value chain to improve efficiency (%)
Cost base
Sales
MarketingTrade execution
Operations
IT
Risk & compliance
HR
Legal & audit
Finance
Management & strategy AI-powered cost base100 1.50-2.50
100
0.50-0.75
98
2.50-4.50
96
94
1.00-1.50
92
0.75-1.50
90
0.25-0.75
0.10-0.25
0.10-0.25
88
0.25-0.50
0.10-0.25
86
85-95
84
82
80

Note: Due to rounding, the sum of each link in the value chain might be different from 100%.
Source: BCG's Global Asset Management Benchmarking Database

Generative AI has been widely used at all stages of the asset management price chain. This
trend is driven by three main factors: higher accuracy than previous generations of natural51

2024 Global Asset Management Center Index Report
language processing, a wider range of applications covering industries and business functions,and more accessible and user-friendly interfaces. In sales and customer service, generative AI
can enhance sales and consultants' ability to engage existing customers and better identify andconvert leads, which can lead to a 30 to 40 percent increase in efficiency, according to a joint
study by Morgan Stanley and Oliver Wyman. In product development, generative AI can speed
up routine tasks such as report drafting, reducing product development time by 25% to 35%.
On the investment and research side, generative AI can replace information gathering and data
cleaning tasks more efficiently, providing portfolio managers with services such as grapefruit
research and risk analysis, improving the efficiency of this process by more than 30%. For
middle and back-office functions, generative AI can save 25% to 50% of time by improving
legal, compliance, and operational efficiencies and enabling code generation.
Table 3-3 BlackRock uses AI to improve user experience and interfaces
Business

Sales andfundraising
Sales andclient service

Marketing

Clientservicing
Product
development

Product
development

Portfolio
management
Investment
research

AI Use Cases

Scenarios

Study

Trade
Risk, LegalandCompliancePersonalized customization according to customer needs
Draft insights and sales talking points on customer customization
Draft customized proposal or response documents
Drafting of customized marketing materials targeted to multiple
channelsSynthesize market feedback and customer data to generate marketingplansTranslate customer inquiries and conduct similar questions in theknowledge basematch, and respond in a customized way
Drafting of customized periodic investor reports
Summarize market intelligence such as comparing trends andcompetitor products
Brainstorming of new product/solution ideas, tailored to client needs
Extract and transform large amounts of information from news orreports to predict market movements or securities risk
Generate market or risk scenarios, synthesize historical and forecast
numbers and back testingProposal of new investment ideas and selecting relevant securities
from a defined universe
Combine studies and pull data from multiple sources
Drafting market commentary and outlook
Drafting of investment committee documents
Validate trading rules by incorporating market information real-timeSmart hedging and unwindingOptimize trading strategies based on counterparty price elasticity
information
Search and aggregate legal and compliance documents
Drafting risk and performance reports

Middle andback-officeBuild and debug code
Customize reports on financial, operational, and technical events on
IT anddemandOperations
Paperwork/form assistant that pre-populate data, suggest complete
versionSource: Morgan Stanley, Oliver Wyman

52

2024 Global Asset Management Center Index Report
In the investment process, artificial intelligence has been integrated into the generation of alpha.
Among them, artificial intelligence has been deeply integrated in the data analysis process,mainly used to establish alternative data sets, build forward-looking indicators and analyze
market indicators, in which the degree of integration of artificial intelligence is more than 50%,and less than 30% of institutions have no integration plan. In addition, continuous monitoring,risk modeling, and portfolio resilience stress testing are important scenarios for asset managers
to integrate AI technology in the future. Asset managers apply AI to conduct research andgenerate alpha, reflecting the emphasis on data analysis, and AI's deep involvement in theinvestment process.
Figure 3-8 The progress of AI integration in the investment process
Already integrated
Used, but not integrated

Partly integrated
Do not plan to integrate

Planning to integrate

Incorporating alternative datasets
43%
15% 7% 6%28%
Developing forward-looking indicators
37%
11% 16% 9%27%Analyzing market indicators
33%
22%
7% 6%
31%
Generating ideas
30%
23%
9% 12%
26%
Removing potential bias from analysis
26%
15%
16% 7%
36%
Forecasting market regimes
22%
14% 15% 10%
40%
Ongoing monitoring
21%
10%
28%
4%
37%
Analyzing scenarios
17%
15%
20%
14%
35%
Modeling risk expectations
16% 14%27%
11%32%
Executing investment decisions 11% 11% 15% 4%
59%
Allocating assets 10% 9% 12% 10%
59%
Stress testing portfolio resilience 10% 9%
25%
9%
48%
To inform engagement processes 6% 16%
23%
9%
46%

Note: Due to rounding, the sum of all categories is different from 100%.
Source: Mercer (US)BlackRock is focused on applying artificial intelligence to improve the customer experienceand improve the efficiency and accuracy of operational workflows. BlackRock uses AIpowered user interfaces to engage with audiences such as large institutions and asset managers,
and is committed to improving customer service, data analytics and technology development,
improving the ability to connect with customers and deliver customized products and solutions
based on customer preferences to help customers achieve their financial or investment goals.
Specifically, BlackRock uses Aladdin Wealth as a tool to help financial institutions carry out
business operations such as risk monitoring and portfolio analysis. In addition, BlackRock uses
artificial intelligence to support pension-related planning through iRetire, providing scenarios
and tax insights through the advisory center.

53

2024 Global Asset Management Center Index Report
Table 3-4 BlackRock uses AI to improve user experience and interfaces

Integrated tools

Overview of the tool
Aladdin Wealth provides an institutional-quality solution to wealthAlladin Wealthmanagement firms and banks, including enterprise-wide business andrisk oversight and portfolio analysis and construction capabilities
FutureAdvisor digitizes the wealth management process for financial

Future Advisor

institutions and their advisors to onboard and serve new client segments
in a scalable way
iRetirehelps financial professionals build plans that are focused on

iRetireretirement saving, spending and income quickly and efficiently using a
repeatable process–so they can focus on client service and asset
acquisition

Advisor Center

Advisor Center provides practice management capabilities, like scenario
analysis and tax insights, powered by Aladdin, on the web

Source: BlackRock

The obstruction of exit channels promotes the development of thesecondary market of private equity in United States
Against the backdrop of a stable policy environment and increasing market demand, the amountof private equity financing has continued to grow over the past decade. In 2013, United States
private equity raised $157.2 billion and 302 funds. By the end of 2023, United States private
equity funds raised as much as $374.8 billion, an increase of 138%. The number of funds was733, an increase of 143%. In the past two years, high global inflation accompanied by a sharp
rise in interest rates has led to a slight decline in the scale of private equity fundraising, with
the number of funds and the amount of funds raised reaching record highs in 2021 and 2022,
respectively.

54

2024 Global Asset Management Center Index Report
Figure 3-9 United States Private Equity Fundraising (USD billion, 2013-2023)
Capital raised

Fund count

400

1000
900
800
700
600
500
400
300
200
100
0

350
300
250
200
150
100
50
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Note: The left axis is the amount raised, measured in billions of dollars. The right axis is thenumber of funds.
Source: PitchBook

The exit of private equity is a key link in the capital formation chain and an indicator of thehealth of the market. In the past two years, private equity exits have declined sharply, with theamount and number of exits falling to record lows. The main factors hindering the exit of private
equity are as follows: firstly, high inflation, which has declined but is still at a high level,
resulting in pressure on the profits of many companies, thereby reducing the attractiveness ofbuyers. Secondly, interest rates remain high, and higher financing costs reduce potential buyers'
willingness to invest. Thirdly, the continuous geopolitical conflicts and uncertainty haveincreased the pressure on the supply chain, causing investors to wait and see and wait for amore stable environment. Fourthly, the risk of global recession still exists, causing investors to
avoid more cyclical industries. Fifthly, IPOs have stagnated, IPOs are an important exit channel
for private equity, and the weak performance of global IPOs has directly hindered the exit ofprivate equity.

55

2024 Global Asset Management Center Index Report
Figure 3-10 Private Equity Exit Size (USD billion, 2013-2023)
Exit value

Exit count

900

2000
1800
1600
1400
1200
1000
800
600
400
200
0

800
700
600
500
400

300
200
100
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Note: The left axis is the exit value in billions of dollars. The right axis is the exit count.
Source: PitchBook

In recent years, the demand for liquidity in the secondary market of private equity has increased
significantly, mainly due to three factors: firstly, the numerator effect, private equity investment
performed better in 2020-2021, and capital raising was relatively smooth, resulting in excessive
allocation of limited partners to private equity. The second factor is the denominator effect, in
2022, the valuations of the stock and bond markets fell, and the private equity fund portfolios
became more resilient, which further exacerbated the overallocation of effective partners;
Thirdly, the withdrawal is depressed, and the allocation of new investments and funds that are
expected to mature in this context has also increased the problem of overallocation to a certain
extent, constituting an important factor in the increase in the scale of transactions in thesecondary market.
From the perspective of market structure, GP-led transactions have become an important partof the secondary market, which can effectively meet the practical needs of general partners,
limited partners and investors in the secondary market. Firstly, for GPs, GP-led transactions
can extend the duration of private equity investments, giving GPs more time to create value. At
the same time, new capital can be brought in from the secondary market to finance the followon investment of the general partner. Secondly, GP-led transactions can provide LPs with theopportunity to realize returns earlier than expected, allowing them to lock in returns and accessliquidity in advance, thereby rebalancing their private market portfolios. Finally, GP-led trading
can be traded at a discount or premium in the secondary market, providing investors with an
attractive risk-return investment opportunity. GP-led transactions have grown rapidly in recent
years, reaching $112 billion in the United States as of 2023, accounting for 53.57% of the total
turnover in the secondary market.

562024 Global Asset Management Center Index Report
Figure 3-11 Private Equity Secondary Market Transaction Size (USD billion, 2002-2023)

Annual value traded

GP-led % of total Value

2023

2022

2021

2020

2019

2018

2017

0%
2016

0
2015

10%
2014

20
2013

20%

2012

40

2011

30%

2010

60

2009

40%

2008

80

2007

50%

2006

100

2005

60%

2004

120

2003

70%

2002

140

Note: The left axis shows the total value traded, measured in US$ billion. The right axis is the
proportion of GP in %.
Source: Greenhill Global Secondary Market Review

The digital transformation of Canada's asset management industry ismore inclined to cloud computing and blockchain technology
For asset managers, data is increasingly becoming an important source of information, an
operational tool, and an investable asset. With the proliferation of data in size and type, theability to interpret data and transform it into usable information has become a key differentiatorin the asset management industry. The ever-increasing volume of data is transforming every
aspect of asset management, including corporate functions, product development, investment
management, and marketing. The digital transformation of the asset management industry is a
global trend that is reshaping the entire industry.
Canada's asset management industry is leading in the application of cloud computing andblockchain technology in the process of digital transformation. CIBC Mellon's survey of 200
asset managers in Canada and around the world shows that in the next three years, 85% of asset
managers in Canada plan to deploy cloud computing technology and use blockchain technology
to improve the data synchronization process, which is relatively ahead of other places in theworld. At the same time, only 45% of Canada asset managers surveyed plan to tokenize theirassets, down from 72% in the rest of the world, and less in areas such as artificial intelligence,robotics and process automation, predictive analytics and document understanding.

572024 Global Asset Management Center Index Report

Figure 3-12 Canada asset management institution's fintech layout plan for the next three
years

Canada

World

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Source: CIBC Mellon

Canada Asset Management is committed to enhancing strategic initiative. In the context ofpassive management becoming a trend, Canada asset managers tend to integrate active
management strategies more closely through technology and other means. Firstly, mostinstitutions are actively deploying active ETFs, with 70% of Canada respondents planning toincrease the application of active ETF strategies in the next five years, pursuing abovebenchmark excess returns by combining ETF operation models with active management
strategies. Secondly, asset managers plan to increase the application of active management
strategies, with 55% of Canada asset managers planning to increase active management
strategies in the next five years, and the remaining 45% planning to make no changes. Thirdly,
enhance the initiative of the strategy through technical means, with 50% of Canada asset
managers plan to enhance the initiative of passive investment through quantitative means andsmart beta strategies in the next five years.

582024 Global Asset Management Center Index Report
Figure 3-13 Canada's asset managers' investment strategies and tools over the next
five years

Increase

Active management

30%

Passive strategies

45%

Active ETFs

45%
35%

15%
45%

No plan

0%50%

ESG strategies

Tokenization

No change

55%

Quant strategies
Crypto currencies

Decrease

40%

15%

20%

35%

5%

45%

70%
20%

15%

15%

5%
60%

5%
25%
5%

Source: CIBC Mellon

Asia-PacificAsia Pacific is the fastest-growing region in the world for asset management, creating newopportunities through greater openness and fintech. Japan has opened Sapporo, Tokyo, Osakaand Fukuoka as special asset management zones to build a leading asset management centerand has announced a series of reform measures. In the process of building a international virtual
asset center, Hong Kong has taken the lead in listing a series of virtual asset futures ETFs andspot ETFs in the Asia-Pacific region, complementing and enriching the supply of asset
management products. At the same time, the China Securities Regulatory Commission (CSRC)
has launched five measures for capital market cooperation with the Hong Kong, bringing more
allocation options to both sides.

Japan's construction of a leading asset management center brings great
opportunities
In December 2023, the Japan government released the Policy Plan for Promoting Japan as a
Leading Asset Management Center, which aims to reform Japan's asset management sector andasset ownership. Under Fumio Kishida's "new capitalism" initiative, the Japan government has
been taking various measures to achieve a virtuous cycle of growth and distribution. In otherwords, the Japan government has been promoting more of Japan's huge savings to flow to
productive investment and returning the increase in corporate value to households, thereby
boosting private sector investment and consumption.

592024 Global Asset Management Center Index Report
Cash and deposits dominate the asset allocation structure of Japan households. Household
investment in Japan lags far behind that of other developed countries, with most household
assets held in bank deposits. In 2023, 54.3% of Japan's household financial assets were cash
and bank deposits, much higher than the 13.7% in United States and 34.5% in Euro Area.
Against the backdrop of rising inflation in Japan, it is necessary to change the structure ofJapan's household financial asset allocation, and the investment of 1000 trillion yen ofhousehold cash and bank deposits will help improve asset returns and bring significant
opportunities to domestic and foreign participants.
Figure 3-14 Comparison of household asset allocation structure in Japan, Euro Area andUnited States (%, 2023)

Cash/Deposit

EquityInvestment trusts

Others

120
100
80
60
40
54.3
20

34.5
13.7

0
Japan

Euro area

United States

Source: Bank of Japan

In order to build Japan into a leading global asset management center, the Japan government
has made the following five major reforms. The first is the reform of the asset management
industry, calling on major financial groups to formulate strategic plans for asset managementbusiness, formulating product governance principles for asset management companies,
rectifying Japan's unique business management and remove barriers to entry, establishingspecial zones for financial and asset management, introducing a new type of manager program.
The second is asset ownership reform, which formulates the principle of asset ownership,including common principles for investment policy, governance and risk management; Reformof occupational pension funds, promote the disclosure of information on defined-contribution
pension portfolios, and encourage pension associations to enrich small database services. The
third is to promote capital formation and investment diversification, and promote venture
capital in start-ups with growth potential, and diversify alternative and sustainable investments.

60

2024 Global Asset Management Center Index Report
The fourth is to work with the Tokyo Stock Exchange to promote effective interaction between
institutional investors and listed companies. The fifth is to strengthen public relations andcommunication, and jointly launch asset management forums with domestic and foreign asset
managers and investors.
The establishment of the asset management special zone provides a great opportunity for global
asset managers to enter Japan. The special zones aim to attract domestic and foreign investment
funds to land by improving the business and living environment to gather financial and asset
management businesses. In June 2024, Japan announced four special zones for financial andasset management businesses: Sapporo, Tokyo, Osaka, and Fukuoka. Among them, Sapporo is
positioned for green transformation, closely integrating industrial and financial functions, andis committed to becoming a special zone for green transformation, financial and asset
management business. At the same time, Tokyo is positioned as a leading city for sustainablefinance, promoting sustainable finance and the growth of Asian start-ups by creating a better
environment as an international financial center. In addition, Osaka is committed to attracting
foreign investment and promoting start-up development and technological innovation. Finally,
Fukuoka is positioned as a gateway to Asia, taking advantage of its geographical proximity to
Asian countries to attract venture capital from Asia and promote the development of Japan startups.
Table 3-5 Japan Special Zone for Financial and Asset Management BusinessSpecial
Zone
SapporoPositionGreentransition
Sustainable
Finance

Areas ofencouragement
RenewableenergySpecific measures○ Deregulation to allow asset managers to outsource

middle and back-office operations● Strengthen English-speaking administrative services
Tokyo
Start-ups● Create a new status of residence for foreigners who
invest in start-ups
ScientificTechnological● Support foreigners to open bank accounts
Osakaresearch
innovation● Deregulate banks' investment in green transformation
institutions
businesses● Expand the investment quota of venture capital funds
for qualified institutional investors○ Removal of compressed hydrogen storage limits
Gateway to
Venture capital ○ Promote the acceptance of foreign nationals throughFukuoka
the points system for highly skilled persons
Asia
in Asia●Provide tax and financial support to foreign financial
and asset managers, reduction and exemption of local
taxes, subsidies for the establishment of local business
bases
Note: Note: ○ indicates measures taken nationwide, and ● indicates measures taken in the Special
Zone.
Source: FSA

61

2024 Global Asset Management Center Index Report
Since Japan proposed to build a leading asset management center, several asset managers haveentered the Japan market. According to the Japan Financial Market Entry Office, since
December 2023, at least eight foreign financial institutions have participated in Japan's financial
market. Among them, there are 5 companies from the United States, 2 companies from theUnited Kingdom, and 1 company from Canada. The continued participation of foreign financial
institutions also reflects the positive global expectations for Japan's asset management market.
Table 3-6 Successful cases of Japan's financial market entry office

Asset managers

OriginLicense

Date

Impax Asset Management Japan Ltd.

UK

IAA

Carlyle Japan, LLC

US

IAA

Muzinich & Co. Japan Pte. Limited

UK

IAA

January 2024

Newton Investment Management Japan Ltd.

US

IAA

January 2024

StepStone Group LP

USType Ⅱ

January 2024

Hines Real Estate Investment Management

US

IAA

February 2024

Alpha Financial Advisors, LLC

US

IAA

March 2024

Brookfield Japan

CanadaType Ⅱ

April 2024

December
2023
December2023

Note: Type II refers to the second type of investment management business under the Financial AssetManagement Association. IAA refers to investment consulting and agency business, and the data is
as of April 2024.
Source: FSA

Hong Kong aims at international virtual asset center and enrich the
supply of asset management products
With the arrival of virtual assets in Web 3.0 and the metaverse, which are increasingly regarded
by global investors as investable assets, bring huge opportunities to the asset management
industry. To fully grasp the opportunities brought by virtual assets to Hong Kong's economy
and asset management industry, Hong Kong is committed to leading the sustainable andresponsible development of the virtual asset industry. In October 2022, the Financial Services
and the Treasury Bureau of Hong Kong officially issued the Development of TechnologicalInnovation in Hong Kong and the Policy Statement on the Development of Virtual Assets inHong Kong (hereinafter referred to as the Declaration), formally proposing to develop Hong
Kong into an international virtual asset hub.
Clear regulation is an important safeguard for the sustainable development of Hong Kong's
virtual asset industry. In order to prevent risks related to virtual assets and protect the legitimate622024 Global Asset Management Center Index Reportrights and interests of investors, Hong Kong has strengthened the supervision of virtual assets.
Among them, the most important is the introduction of a licensing regime for virtual asset
trading platforms. Since 1 June 2024, central virtual asset trading platforms operating in Hong
Kong or marketing services to Hong Kong investors must be licensed and regulated by the
Securities and Futures Commission (SFC) of Hong Kong. As of 9 July 2024, there are 2 licensed
virtual asset trading platforms in Hong Kong, and another 13 are in the process of applying forcorresponding licenses.
Table 3-7 Licensing of virtual asset trading platforms
Operator of virtual asset trading platforms

Virtual asset trading
platform

Licensed status

Date ofapplication
December2020
November2022
November
2023
December
2023
December
2023

OSL Digital Securities Limited

OSL Exchange

Licensed

Hash Blockchain Limited

HashKey Exchange

Licensed

Panthertrade (Hong Kong) Limited

PantherTrade

Applying

Accumulus GBA Technology(Hongkong) Co.,Limited

Accumulus

Applying

DFX Labs Company Limited

DFX Labs

Applying

NewBX Limited

Bixin.com

Applying

January 2024

Thousand Whales Technology(BVI) Limited

EX. IO

Applying

January 2024

HighBlock Limited

bitV

Applying

YAX (Hong Kong) Limited

YAX

Applying

Bullish (GI) Limited

BullishApplying

Foris DAX HK Limited

Crypto.com

Applying

Whalefin Markets Limited

WhaleFin

Applying

Flying Hippo Technologies Limited

Matrixport HK

Applying

hi5 (Hong Kong) Limited

HKX

Applying

Bitcoin World Technology Limited

bitcoinworld

Applying

February2024
February2024
February2024
February2024
February2024
February2024
February2024
May 2024

Note: As of 9 July 2024, the dates of OSL Exchange and HashKey Exchange refer to the date of licensing.
Source: SFC

The development of an international virtual asset center has provided Hong Kong with abundantasset management products, making Hong Kong a leading virtual asset ETF issuer in Asia.
Following the issuance of the Declaration, Hong Kong took the lead in listing the first batch ofvirtual asset futures ETFs in Asia. On December 16, 2022, CSOP Asset Management Limited
listed CSOP Bitcoin Futures ETF and CSOP Ethereum Futures ETF in Hong Kong, becoming

632024 Global Asset Management Center Index Report
the first virtual asset futures ETF in Asia and the first Ethereum futures ETF in the world. The
listing of these ETF products allows global investors to allocate virtual assets in a regulated
environment in the Asian time zone. On April 30, 2024, ChinaAMC (Hong Kong) Co., Ltd.,
Bosera Fund (International) Co., Ltd. and Harvest International Asset Management Co., Ltd.
listed six virtual asset spot ETFs on the Hong Kong Stock Exchange, becoming the first batchof virtual asset spot ETF products in the Asian market.
Table 3-8 HKEX Virtual Asset ETF
Virtual asset ETFs

Underlying Asset

Listing date

CME Bitcoin Futures

December 2022

CME Ethereum Futures

December 2022

CME Bitcoin Futures

January 2023

Huaxia (Hong Kong)

CME CF Bitcoin Index

April 2024

Huaxia (Hong Kong)

CME CF Ethereum Index

April 2024

Bosera International

CME CF Bitcoin Index

April 2024

Bosera International

CME CF Ethereum Index

April 2024

Harvest Bitcoin Spot ETF

Harvest International

CME CF Bitcoin Index

April 2024

Harvest Ethereum Spot ETF

Harvest International

CME CF Ethereum Index

April 2024

CSOP Bitcoin Futures ETF
CSOP Ethereum Futures ETF
Samsung Bitcoin Futures
ETF
ChinaAMC Bitcoin Spot
ETF
ChinaAMC Ethereum SpotETF
BOSERA HASHKEYBITCOIN ETF
BOSERA HASHKEYETHEREUM ETF

Asset managers
CSOP AssetManagement
CSOP AssetManagement
Samsung AssetManagement (HongKong)

Source: HKEX

Virtual asset ETFs provide a convenient and secure way for investors to participate in virtual
asset trading. Firstly, because ETF products are strictly regulated, and ETF fund managers caneffectively reduce the volatility of virtual asset ETFs through active management, investors do
not need to face large fluctuations in virtual asset prices. Secondly, ETFs can help investors
allocate virtual assets while minimizing the risk of investors setting the wrong password, losing
their keys, or becoming a victim of cryptocurrency theft. Thirdly, the trading design of virtual
asset exchanges is complex, and ETFs based on virtual asset futures or spot can be tradedthrough broker accounts, which can provide investors with a convenient and relatively low-cost
trading method due to their similarity to stock trading. Fourthly, compared with virtual asset
futures, virtual asset ETFs do not require margin, and can be included in the virtual asset
portfolio to diversify and reduce the risk of the portfolio. However, at the same time, virtual
asset ETFs can only be traded during the opening hours of the stock exchange, which restricts
the participation of some professional investors to a certain extent compared with the roundthe-clock trading of virtual asset exchanges.

642024 Global Asset Management Center Index Report
Table 3-9 Advantages and disadvantages of virtual asset ETFs, futures, and direct
participation
Virtual asset ETFs

Advantage

Disadvantage

Regulated
Safe
Convenient - similar tostock trading
Portfolio diversification
reduces risk
Trading is only available
when the stock exchange is
openRegulatory Restriction
Options

Virtual asset futures

Virtual assets spotsisRound-the-clock tradingIt can be bought and soldin different fiat currencies
Can be used for digital
payments

High concentration risk
An account needs to be setupMargindeposits
arerequiredHigh concentration risk
An account needs to be
set up
Withdrawals
usuallyrequire a service fee

Regulated
Cost-effectivenessachieved with leverage

Source: HKEXThe deepening co-operation between the capital markets of the Chinese
mainland and Hong Kong has brought more allocation options to bothsides
Expanding and optimizing the cross-border connect mechanism of the capital market is an
important starting point for promoting the high-level institutional opening of the capital market,
which will help enhance the competitiveness and influence of Shanghai as an international
financial center and consolidate and enhance Hong Kong's status as an international financial
center. To further deepen financial co-operation between the Chinese mainland and Hong Kongand promote the coordinated development of the capital markets of both sides, the China
Securities Regulatory Commission (CSRC) announced five measures for capital market cooperation in Hong Kong on 19 April 2024. The cooperation mainly includes five aspects, thefirst is to lend the scope of eligible products of equity ETFs under the Stock Connect. The
second is to include REITs in the Stock Connect. The third is to support the inclusion of RMB
stock trading counters in the Hong Kong Stock Connect. The fourth is to optimize the mutual
recognition of funds arrangement, and the fifth is to support the listing of Chinese mainland
industry leaders in Hong Kong. In the long run, it will directly help enrich the supply offinancial products in the two places, broaden the investment options in the market, and facilitate
the development of the asset management industry, thereby enhancing the status of the twoplaces as international financial centers.
First of all, the relaxation of the scope of eligible products of equity ETFs under Stock Connect
has effectively contributed to the development of asset management centers in the two places.
Under the guidance of the regulators of both sides, the Shanghai Stock Exchange, Shenzhen
Stock Exchange and the Hong Kong Stock Exchange will relax the requirements on the average
AuM of eligible equity ETFs, the requirements for the weighting of local stocks in the tracking652024 Global Asset Management Center Index Report
index, and the adjustment threshold for ETF products. Specifically, on April 19, the Shanghai,
Shenzhen and Hong Kong Stock Exchanges announced the latest ETF inclusion criteria, on
July 12, the latest list of eligible ETFs was announced, and on July 22, the expansion of eligible
ETFs officially took effect.
Table 3-10 Adjustments to the range of eligible products of equity ETFs under Stock
Connect
The scope of eligible ETFs before therelaxation
The average daily asset size in the firstsix months was not less than 1.5 billion
yuanSouthbound The weighting of Shanghai and
ETF
Shenzhen in the tracking index is not lessthan 90%
The threshold for transfer is 1 billion
yuan per day in the first six months
The inclusion threshold shall not be lessthan HK$1.7 billion
The equity weight of China and Hong
NorthboundKong in the tracking index is not less than
ETF
90%The threshold for redeployment is lessthan HK$1.2 billion
Source: Securities & Futures Commission of Hong Kong

The scope of eligible ETFs after therelaxation
The average daily asset size in the first six
months was not less than 600 million yuan
The weight of Shanghai and Shenzhen in
the tracking index is not less than 60%
The threshold for transfer is 400 million
yuan per day in the first six months
The inclusion threshold shall not be lessthan HK$550 million
The equity weight of China and Hong
Kong in the tracking index is not less than60%
The call-out threshold is less than HK$450
millionWith the official entry into force of the expansion of eligible ETFs under Stock Connect,
international investors will further influx of allocated funds. In recent years, the scale of foreign
investors' investment in domestic ETFs through Shanghai-Hong Kong and Shenzhen-Hong
Kong Stock Connect has steadily increased. In May 2023, the trading value of northbound ETFs
totaled 10.2 billion yuan. in June 2024, it has increased to 21.5 billion yuan, with an increaseof 111%.

66

2024 Global Asset Management Center Index Report
Figure 3-15 ETF turnover under Stock Connect (HK$ billion, RMB 100 million, 2023.052024.06)

Shanghai Connect SB ETF

Shenzhent SB ETF

NB ETF

1000
900
800
700

600
500
400
300
200

100
0

Source: HKEXSecondly, the inclusion of REITs in Stock Connect will further enrich the supply of underlying
financial products. The increase in the number of investment targets available for allocation canenhance the ability to serve the real economy and better meet the investment needs of the market.
On the one hand, the inclusion of REITs in the Stock Connect expands the investor group,
directly improves the market liquidity of the corresponding products, and the active trading inthe secondary market can be transmitted to the primary market, which in turn drives thedevelopment of REITs in new infrastructure such as data centers, and scientific andtechnological innovation industrial parks, and broadens the source of incremental funds. On theother hand, REITs, as a typical stable dividend-paying alternative asset, have a low correlation
with traditional financial products such as stocks and bonds, which can better help investors
and asset managers build diversified portfolios.
Thirdly, the inclusion of the RMB stock trading counter in the Stock Connect will facilitate
domestic participation, strengthen Hong Kong's status as an offshore RMB center and promote
the internationalization of RMB. In June 2023, the Hong Kong Stock Exchange (HKEX)
launched the Hong Kong and RMB Dual Counter model, which allows investors to trade andsettle the underlying securities in both HKD and RMB. Firstly, the inclusion of RMB stock
trading counters can save exchange costs and reduce exchange rate risks, thereby greatly
enhancing the convenience for domestic investors to participate in Hong Kong's capital market.
Secondly, this move increases the number of scenarios for asset allocation in some offshore
Renminbi, which will help cement Hong Kong's position as an offshore Renminbi center.
Thirdly, the increase in RMB-denominated products and the expansion of offshore RMB

67

2024 Global Asset Management Center Index Report
repatriation channels can increase the recognition and frequency of use of offshore RMB,
thereby further promoting the internationalization of RMB.
In addition, the enhancement of the MRF arrangement can facilitate the cross-border
distribution and asset allocation of fund products. On 14 June 2024, the China Securities
Regulatory Commission (CSRC) amended the Interim Provisions on the Administration of
Recognized Hong Kong Funds and issued the Administrative Provisions on Recognized Hong
Kong Funds (Draft Amendments for Comments), and the SFC has accordingly relaxed therelevant restrictions on the certification of funds in the Chinese mainland based on the principleof reciprocity. The optimization of the MRF is mainly focused on the relaxation of sales
restrictions and the decentralization of investment management functions. In terms of sales
restrictions, the restriction on the proportion of mutual recognition funds sold to clients will be
relaxed from 50% to 80%. In terms of investment management functions, the investment
management functions of MRF are allowed to be delegated to the overseas asset management
institutions of the same group as the manager. The enhancement of the MRF arrangement will
greatly facilitate the cross-border distribution and asset allocation of asset managemers, andpromote the sustainable development of the asset management industry in both places.
Figure 3-16 Cumulative subscription of Chinese Mainland-Hong Kong Mutual
Recognition Funds (100 million yuan, 2016-2024)
Net subscription of HK funds

Net subscription of mainland funds (right axis)

Source: Wind

Finally, supporting the listing of leading Chinese mainland enterprises in Hong Kong can better
serve the development of the the real economy and consolidate Hong Kong's status as aninternational financial center. Affected by the global environment, economy and financial
market performance, the number of IPOs in Hong Kong has continued to decline in recent years.
Mainland companies have been an important source of IPOs in Hong Kong, with 56% of the682024 Global Asset Management Center Index Report
2617 listed companies coming from the mainland. ①From the implementation of the overseas
listing filing management system in March 2023 to the end of June 2024, 90 companies havecompleted IPOs in Hong Kong. With the introduction of supportive policies, more high-quality
enterprises will list in Hong Kong, which will help share the dividends of China's economic
development, improve the structure of Hong Kong's stock market and consolidate Hong Kong's
status as an international financial center. At the same time, the expansion of financing channels
in Hong Kong will help mainland enterprises make full use of the two markets and two
resources, thereby better contributing to the development of the real economy.
Figure 3-17 Number of IPOs on the Hong Kong Stock Exchange (2012-2023)
250

200

150

100

50

0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Source: Wind①

The data is sourced from the Hong Kong Stock Exchange and is dated to the end of June 2024.

692024 Global Asset Management Center Index Report

OUTLOOK
Looking ahead, the global asset management industry will face new opportunities andchallenges in an ever-changing macroeconomic environment. Firstly, as global monetary
policies gradually shift towards easing, interest rates in major economies are expected to decline
further. This will prompt asset management institutions to adjust their fixed-income
investments, particularly in short- and medium-term bonds, to capture opportunities for priceappreciation. Additionally, they will place greater emphasis on growth stocks and technology
stocks to leverage the market momentum brought about by interest rate cuts, while diversifying
their portfolios to spread risk. Moreover, asset management firms will closely monitor market
liquidity to ensure they maintain sufficient defensive assets in times of increased volatility.
Secondly, the development of financial technology, especially the application of artificial
intelligence and blockchain technology, will continue to reshape the operating models andcompetitive landscape of the asset management industry. Asset management institutions will
increasingly rely on technological tools to enhance operational efficiency, optimize portfolios,
and achieve more precise asset allocation on a global scale. In the future, the deep integrationof technology and asset management will become a key driving force for industry growth, andleading asset management centers will further enhance their global competitiveness throughtechnological innovation.
Finally, as ESG (Environmental, Social, and Governance) principles gain widespread
acceptance globally, the asset management industry's focus on sustainable development willcontinue to rise. Over the coming years, demand for ESG-related products and alternative assets
is expected to grow, leading asset management institutions to invest more in green finance andsocially responsible investments. The performance of major asset management centers inpromoting sustainable investment will become a critical benchmark for measuring their futurecompetitiveness.

70