The JPMorgan Asian Total Return Bond Fund, which has gathered 90% of the northbound MRF net sales in the first eight months, has imposed a daily subscription limit of RMB 10,000 or $1,000 for all investors since late August after strong inflows, a spokeswoman for JP Morgan Asset Management said.
The main reason is “a voluntary limit on new subscriptions due to concerns about capacity,” according to consultant Z-Ben Advisors.
Another possible concern is that any MRF funds cannot have cross-border net inflows exceeding more than half of the fund’s total assets.
“In order to safeguard the interests of existing investors, this proactive and protective measure will enable us to pace inflows to the fund and to ensure our ability to generate competitive results for existing investors is not affected,” the spokeswoman explained.
The fund size (all share classes) reached $3.92bn as of September, up $99m or 2.6% from a month earlier. Still, the fund assets have surged by 80%, or $1.73b since the beginning of the year thanks to cross-border sales.
Another JPM MRF fund, JPMorgan Pacific Securities Fund, is not affected.
Northbound net flows under the Mutual Recognition of Funds scheme shrank to RMB 561.6m ($82.8m) in September from RMB 3.95bn ($593m) in August, according to the latest data from the State Administration of Foreign Exchange.
So far five Hong Kong-domiciled funds are selling to onshore investors via the scheme, while sales growth has accelerated during the past few months.
On the other hand, southbound flows remained steady. Net sales reached RMB 15.1m last month, largely the same as in August. About 25 onshore funds are selling in the SAR.
| Monthly net sales in RMB millions | Northbound | Southbound |
| September | 561.6 | 15.1 |
| August | 3,951.4 | 15.4 |
| July | 1,108.9 | 6.3 |
| Total net sales since January 2016 | 8,389.5 ($1.2bn) | 96.8 ($142.8m) |
Source: State Administration of Foreign Exchange
