The Aberdeen Global China A Share Equity Fund has gathered the highest amount of net inflows in 2017 among Greater China equity mutual funds, according to data from Morningstar for the first seven months of the year (The fund is authorised for sale in Singapore, where it was launched in 2015).
The net inflow into the Aberdeen fund was $357m, more than that of the second and third top asset gatherer combined: the Eastspring Hong Kong Equity Fund ($166m) and the Henderson China Opportunities Fund ($151m).
Biggest inflows
| Fund | Net YTD Inflows |
| Aberdeen Global China A Share Equity | $357m |
| Eastspring Hong Kong Equity | $166m |
| Henderson China Opportunities | $151m |
None of the three funds are the largest in the category. The Aberdeen fund had $976m AUM on 31 July, the Eastspring fund $1.3bn and the Henderson fund $984m.
The largest in the category, the Fidelity China Focus Fund, had $4.32bn in AUM on 31 July and net outflows of $124m in 2017.
The Greater China equity mutual funds with the biggest outflows during the same period were the First State China Growth Fund, the Schroder ISF Hong Kong Equity Fund and the BGF China Fund.
Biggest outflows
| Fund | Net YTD Outflows |
| First State China Growth | $499m |
| Schroder ISF Hong Kong Equity | $335m |
| BGF China | $312m |
The outflows from the Schroders Hong Kong fund can be interpreted as profit taking, since the fund comfortably outperformed the Eastspring Hong Kong equity fund in the first half of 2017, as illustrated in the chart.
ETFs on pace with active
Among Greater China equity ETFs, the US-domiciled Kraneshares CSI China Internet ETF gathered the most new assets in 2017, $524m until 31 August, the latest data available.
The Hong Kong-domiciled CSOP FTSE China A50 ETF and the iShares MSCI Taiwan Capped ETF gathered $323m and $293m, respectively.
The highest outflows so far have been among Hong Kong-domiciled ETFs. The Hang Seng H-Share ETF saw an outflow of $1.62bn in assets, while the iShares FTSE A50 China ETF lost $800m and the Tracker Fund of Hong Kong lost $608m.
Overall, Hong Kong ETF investors appeared to be divesting from their local Hong Kong equity holdings, while adding to China exposure. They also favoured the CSOP FTSE China A50 ETF over the iShares product tracking the same index.
Blackrock has been in the process of transforming its iShares FTSE A50 China ETF from synthetic to physical replication, and added a renminbi counter only in July 2017, while the CSOP ETF is natively denominated in China’s currency, and from the start based on physical replication. Both products carry the same annual charge of 0.99%.
Investor preference for the CSOP product suggests they like physical replication in ETFs and have a preference for buying China equity products in the country’s own currency.
