Reuters News - Japan retail investors pour $2.3 billion into fund investing in N. America

TOKYO | Thu Dec 27, 2012 5:34am EST

(Reuters) - Japanese retail investors poured about $2.3 billion in a mutual fund that mainly invests in U.S., Mexican and Canadian shares, the biggest subscription since October 2006, a distributor of the fund, SMBC Nikko Securities, said on Thursday.

The country's third-largest money manager, Nikko Asset Management, launched the Japan domiciled fund, called Nikko Gravity Americas Fund, which attracted 200.1 billion yen ($2.3 billion) at the launch - the third biggest subscription ever.

Its subscription ceiling is set at 300 billion yen.

Cash-rich Japanese investors heavily bought the Nikko Gravity fund on expectation of strong potential U.S. economic growth with the recent rise in the dollar against the yen encouraging their interest, an official at SMBC Nikko said.

The fund makes allocations in line with its model portfolio, which gives a 64 percent weighting in U.S. shares, 14 percent in Mexican shares, 10 percent in Canadian shares and the rest split in Latin American countries including Columbia and Brazil, Nikko Asset's document on its website showed.

The fund's allocations in sectors include 20 percent in energy - the highest weighting - followed by 15 percent each in financial and information technology.

Japan's $720 billion mutual fund market is the second-largest in the Asia-Pacific region after Australia and the eighth-largest in the world.

Japanese individuals hold a massive 1,500 trillion yen in personal assets of which 57 percent is held in low-yielding bank and postal savings, while less than 4 percent is invested in mutual funds, Bank of Japan data shows.

($1 = 85.6700 Japanese yen)

(Reporting by Michiko Iwasaki and Chikafumi Hodo; Editing by Matt Driskill)