FSA analysed the fund flows of Hong-Kong domiciled mutual funds and ETFs.
Two income-oriented mutual funds gathered most net new assets in the first half of 2017, making HSBC and JPMorgan the most successful asset gatherers in Hong Kong during that period, according to fund flows data from Morningstar.
The HSBC Asia High Income Bond Fund, launched on 24 February, tapped into clients’ demand for income, by gathering $1.59bn net assets. In total, HSBC AM’s seven funds domiciled in Hong Kong gathered $1.41bn of net new assets.
However, the firm’s China Multi-Asset Income Fund had $141m net outflows.
The JP Morgan Multi Income Fund (a mixed-asset, or allocation fund) saw $1.05bn of net inflows in the first half of 2017. The firm’s 42 funds domiciled in Hong Kong added net $522m of inflows, with its Global Bond Fund and two Asia ex-Japan equity funds suffering biggest ouflows.
Fixed income flow
In the universe of all funds domiciled in Hong Kong, fixed income funds saw net inflow of assets in the first half of 2017, after mostly outflows in the period since September 2016 till January 2017. Mixed-assets funds were also in demand in the January-June period, while equity funds were being sold off.
Net asset flows of Hong Kong-domiciled mutual funds
Data: Morningstar, in US dollars
The biggest inflows during the period were into Asia mixed-asset and fixed income funds together gathered net $3bn. The biggest outflows ($2.76bn) were from Greater China equity funds.
Hong Kong investors were likely realising profits on strong equity markets while pivoting toward mixed-asset and fixed income products to a more cautious positioning.
In terms of individual products, the biggest loser in the first half of 2017 was the Hang Seng H-Share ETF, with net outflows of $1.25bn. It was followed by the Value Partners High-Dividend Stocks Fund, which lost $627m and the iShares FTSE A50 China ETF with $504m of net outflows.
Looking at firms, the biggest outflows were from funds managed by Hang Seng Investment Management, which had $1.68bn in net outflows. Its two global equity ETFs added to the losses.
Value Partners’ three other Greater China equity funds contributed to the firm’s total $879m of net outflows.
