Japanese investment trusts, or "toushin", saw the first net outflow of funds in six months in April, industry data showed on Tuesday, following scathing criticism of the industry from the head of the country's financial watchdog. Investors pulled 31.1 billion yen ($275 million) of funds from toushin in April, the first monthly net outflow since October.
In another indication of the slowdown in business, the number of new fund launches in May was also likely to be around 20 - the lowest since data was available from 2007, said the Investment Trusts Association, Japan. If outflows from the toushin funds accelerate, that could force fund operators to sell assets, which will affect markets. Industry officials say many financial institutions have slowed or refrained from aggressive sales of some toushin funds after Nobuchika Mori, the commissioner of the Financial Services Agency, blasted the Japanese asset management industry for not catering to the true benefit of its customers. In a speech to financial professionals in early April, Mori railed at Japanese investment trusts' high fees and low investment returns.
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