Japan, meanwhile, came back to life. Still, foreign mutual fund managers experienced a small setback in Japan this year. Their share of investment trust assets, which totaled slightly more than 60 trillion at the end of June, fell to 7 percent, down from 10 percent at the beginning of 1999. An exodus of money from foreign bond funds following the yen's sharp appreciation against the dollar late last year triggered the outflow, which was exacerbated by a sharp appreciation in Japanese equity prices. After Japanese investors lost money in foreign bond funds, this myth ended, and they became a little bit skeptical about foreign asset management companies.
Experts anticipate only a temporary loss of market share for foreign firms.
Today just 2 to 3 percent of personal financial assets are allocated to mutual funds. Takado conservatively predicts that money invested in mutual funds will grow from 60 trillion at the end of June to at least 75 trillion in five years. But if a firm has solved that and has good investment product, it's probably going to grow assets more quickly in Japan than it would in any other market in the world. This is a relatively easy market in which to pick up assets. No one would describe China as a simple market, but money managers are excited about prospects on the mainland.