Fitch Ratings expects Malaysia's fund management industry to hit $300 billion in assets under management through the second half of 2026 and into 2027, according to a Sunday release.
Total industry AUM accounted for about 60% of GDP at the end of the first quarter, or a 9.5% annual increase to $283 billion, Fitch said.
Sufficient domestic liquidity, government efforts and support, a stronger ringgit, and distribution channel expansion have anchored the growth, Fitch said.
Fitch expects retail investors to be a major driver of industry assets, with institutional investors also crucial to this expansion.
The rating agency sees limited direct impact from the Iran conflict, as most exposures are domestic.
Investment funds also show strength against redemption shocks, Fitch said, citing stress tests from the Securities Commission.
However, the sector still faces challenges such as increasing competition from alternative investment products, digital investment platforms straying away from a traditional relationship-manager model, and increased asset manager consolidation.