Asset Management Company
Newly established Asset Management One* will work together with Mizuho's banking, trust banking, and securities functions to provide customers with products and services that will respond to a broad range of their needs
- *Newly formed Asset Management One will commence operations in October 2016 and bring together the asset management functions of the Group in a single company.
The Asset Management Company works together with its banking, trust banking, securities, and companies providing asset management to serve the needs of a wide range of customers, from individuals to institutional investors (pension funds, financial institutions, business corporations, etc.) by providing products and services of the highest quality.
A new asset management company will be formed from the integration of DIAM, the asset management functions of MHTB, MHAM, and Shinko Asset Management and will play a central role in the Company. This company will be established and begin operations in October 2016, named as "Asset Management One."
Asset Management One will bring together their asset management know–how in the domains of investment trusts, investment advisory, trust banking, and life insurance. It will offer products and services that will aim to substantially increase customer satisfaction.
In addition, MHBK and MHTB are in charge of management and administration for DC pension plans*1, which are long–term and tax–exempt asset formation scheme.
Furthermore, MHTB will administer DB pension plans*2, while MHSC is responsible for management of wrap accounts*3.
- Assets under Management as of March 31, 2016
- *1Defined Contribution Pension Plan
- *2Defined Benefit Pension Plan
- *3Under wrap accounts, individual customers sign discretionary asset management contracts with securities companies or trust banks, and they provide services covering from asset management to administration services
Key Aspects of the Company
Conditions in the External Environment
- Expansion of the range of tax–exempt asset formation scheme, including introduction of NISA* and DC pension plan reforms
- Ongoing shift from savings to investments
- Possibility that public pension payments may be cut in the future due to the decline in the birthrate and demographic aging of the population
- Introduction of a negative interest rate policy by the Bank of Japan
- *NISA: Small–lot, tax–exempt investment accounts
Issues for Mizuho
- Strengthen its capabilities for providing products and services to accelerate the shift "from savings to investments" among individual customers
- Strengthen the offerings of high–value–added products and services, as well as its consulting functions, for institutional investors
- Strong capabilities for asset management and product offerings of Asset Management One in which Mizuho's asset management know–how in investment trusts, investment advisory, trust banking, and life insurance were integrated
New Medium–term Business Plan for the Company (FY2016 through FY2018)
Developing product capabilities, which is the driver for the asset management business
The Company will contribute to the vitalization of household financial assets through providing high–quality products and services that draw on the strengths developed in a variety of business lines of the companies to be integrated into Asset Management One, and develop investment products which will be suitable to medium– to long–term asset building for individual customers who need stable asset formation and solutions for coping with negative interest rate as well as products which can substitute for deposits, thus encouraging a shift "from savings to investments."
For institutional investors who have sophisticated asset management needs such as further portfolio diversification and stabilization and identifying alternatives to investments in government bonds, the Company will make full use of the management know–how of Asset Management One.
In addition, in the pension business, it is expanding its service offerings along with its consulting functions.
- Net Business Profit for Fiscal 2018 (Plan)
- *Before head office expense deduction
- Net Inflow of Publicly Offered Stock Investment Trusts(excl. ETFs*)
- *Exchange Traded Funds
Major Strategies under the New Medium–term Business Plan
Providing Solutions that Support Sustainable Growth of Customers and Society
Develop and offer asset formation products that will provide a bridge for individual customers to shift "from savings to investments"
In view of the declining birthrate and aging of the population, there is a strong possibility that the level of payments from public pensions may erode. Accordingly, it will become increasingly important for individuals to build their asset portfolios through asset management on their own initiative.
According to the "2014 Actual Valuation of the Employees' Pension Insurance and the National Pension," prepared by Japan's Ministry of Health, Labour and Welfare, the income replacement ratio* was 62.7% in fiscal 2014, but the outlook is for a gradual decline to 50.6% by fiscal 2043. In addition, it is necessary to consider the possibility that cash and deposits set aside by individuals for their retirement would be eroded by inflation.
In view of this pension market environment, to meet the medium– to long–term asset formation needs of individual customers, Mizuho is working to develop and offer asset management products that will lead to the shift "from savings to investments." In addition, through these initiatives, we will contribute to vitalizing domestic financial assets.
- *This ratio shows the amount of public pension payments that pensioners receive when they begin to receive pensions at age 65, compared with the cash salaries received (including bonuses) of persons of working age.
Review of Fiscal 2015
For individual customers, we offered investment trust, fund wrap, and other products to meet their needs for medium– to long–term asset formation. For institutional investors, we offered advice on asset allocation and the combination of asset management strategies based on analysis and evaluation of their portfolios.
Also in the DC pension plan business, Mizuho is in the top ranks in terms of the number of subscribers and assets under management in corporate–type DC pension plans.
- Number of Corporate DC Subscribers
(Source) Newsletter on Pension & Investments
Decided to Integrate Group Asset Management Functions: Birth of a Leading Asset Management Company in Asia
The company's name, "Asset Management One," represents our vision of becoming the number one asset management company in terms of customer trust by providing a higher level of satisfaction through the collaboration among the four companies integrated into the new company. Furthermore, the new name also represents our aim to become the number one asset management company in Asia and become competitive with the largest global asset management companies.
The establishment of Asset Management One will mark the birth of an asset management company that is outstanding quality and quantity. In terms of quality, in the public investment trust and investment advisory, it will offer various funds that have been highly regarded by third parties. In terms of quantity, Asset Management One will have assets under management (AUM) of JPY 52 trillion, which will make it a top–class AUM in Asia. It will also result in the top ranks in terms of funds entrusted from Japan's GPIF*, which is the largest public pension fund in the world.
- *1Government Pension Investment Fund
- *2As of March 31, 2015 (Source) GPIF
- Assets Under Management
Capital and business alliance with Matthews Asia*
- *Brand name for Matthews International Capital Management
Mizuho entered into a strategic capital and business alliance with Matthews Asia, which is an independent, privately owned firm and the largest dedicated Asia investment specialist in the United States. The alliance will enhance Mizuho's capabilities to respond to customers' needs as well as expand Mizuho's global asset management platform. Mizuho will work to expand the lineup of competitive investment products that cover the pan–Asia region.
- Note:The above contains statements that constitute forward–looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. See the disclaimer at the bottom of page 3 of 2016 Integrated Report(PDF/10,751KB)for information regarding factors that could cause actual results to differ from those in the forward–looking statements.