China is expected to see a tripling in mutual fund assets by 2015 as the government effects changes to open up investment opportunities and internationalise the local currency, a new report commissioned by Citi reveals.

The report, titled "China: The World's Best Opportunity for Asset Managers?"  explores growth opportunities for the insitutional and retail asset management industry in the country. Public assets, or mutual funds, for one, are likely to reach over $1 trillion by 2015 and possibly double again by 2020. The rapidly aging population is also expected to drive growth in the pension system. To-date, China's share of global market capitalisation is at 11 per cent.

Given these prospects, the report says that it's highly possible for China to evolve as its own distinct asset class, separate from BRICS and emerging markets. With its open architecture for retail financial product sales, domestic banks will remain the dominant distribution channel, with foreign banks expected to function as fund distributors. On the institutional front, asset managers can aspire for more near-term opportunities as the local market adopts a more sophisticated view on asset alocation and investments. 

"This is an exciting time for the asset management industry in China. An on-the-ground presence and a clear strategy to structure a market entry effort can maximize the chance of success," said Stewart Aldcroft, senior advisor to Citi Transaction Services, Asia-Pacific. 

The report was compiled by Z-Ben Advisors for Citi, which is introducing its OpenInvestor investment services product in the region. Citi currently has $13 trillion in assets under custody across over 95 countries.