In 2017, bond funds dominated the asset inflows with $10.6bn in net sales.
However, the first six months of 2018 has been a huge reversal, with outflows in every type of fixed income except US-focused products.
Altogether, fixed income products lost $6.2bn in assets, led by global and high yield bond products.
Bond fund sales in 2018 1H
| Net sales (US$) | ||
| Bond funds | 2018 1H | 2017 1H |
| Global | -2.56bn | 996.7m |
| US | 262m | -43.2m |
| Europe | -248.5m | 17.6m |
| Asia | -1.22bn | 1.92bn |
| Emerging markets | -224.8m | 247.9m |
| High yield | -2.22bn | 2.44bn |
| Total | -6.2bn | 5.58bn |
Source: HKIFA
The data covers transactions in funds that are authorised by the Securities and Futures Commission for sale in Hong Kong and conducted through retail banks, independent financial advisors, insurance companies and direct clients, according to HKIFA.
Robust equity funds (ex-China)
Equity funds, however, have been having a strong year, in total recording $917m in inflows versus $3.78bn in outflows during the same period in 2017, HKIFA data shows.
There were some notable exceptions, mainly driven by China equities, which have been under pressure largely due to the ongoing tariff war with the US.
Increasing volatility in China’s A-share market kept the net sales of China and Greater China equity in negative territory.
However, Hong Kong equity funds had inflows of $31.6m.
Luke Ng, senior vice president at FE Analytics Asia, told FSA previously that Hong Kong’s stock market is comprised of many companies operating on the mainland, which makes it sensitive to China’s macroeconomics and policies. He noted that the quality companies, with a strong business focus within Hong Kong, tend to perform better than those that mainly operate on the mainland.
Equity fund sales in 2018 1H
|
|
Net sales ($) | |
| Equity funds | 2018 1H |
2017 1H |
|
Asia regional (excl. Japan) |
234.2m | -871.6m |
| Asia regional (incl. Japan) | 39.3m |
-13.9m |
|
Greater China |
-401.3m | -358m |
| China | -135.2m |
-931m |
|
Japan |
2m | -79.3m |
| Hong Kong | 31.6m |
-426.1m |
|
Asian single market (non Japan/China/HK) |
-138.5m | -74.2m |
| International | 364.6m |
-703.5m |
|
European regional market (excl. Eastern European countries) |
-356.6m | -355.3m |
| European regional market (incl. Eastern European countries) | -52.5m |
-41.3m |
|
European single market |
-6.9m | -23.1m |
| North America | 136.1m |
-140.2m |
|
Global emerging markets |
534.6m | -1.9m |
| Eastern Europe emerging markets | -42.6m |
-7.4m |
|
Latin America emerging markets |
-45m | -16.3m |
| Sector funds | 759.7m |
269m |
|
Reits-related funds |
-5.9m |
-3.2m |
|
Total |
917.6m |
-3.78bn |
Source: HKIFA
Flight to mixed asset?
While investors hedged the risk of a market correction, mixed-asset funds doubled assets in the first half, leading all asset classes with most net inflows.
Mixed asset had total net sales of $7bn in the first half, compared to $3.1bn over the same period in 2017.
During the second quarter, the mixed-asset category, with a net inflow of $3.85bn, was the only category that managed to gather additional assets, according to HKIFA.
Mixed-asset fund sales in 2018 1H
|
Fund category |
Net sales |
| Global |
$1.02bn |
|
Asia |
$2.26bn |
| Others |
$3.74bn |
|
Total |
$5.75bn |
