During the first 11 months of 2015, net new capital flows into equity funds more than doubled to $106bn compared to the full year 2014.
Yet during the same period, mixed asset funds received the most inflows ($56bn), compared to a 2014 outflow of $25bn, according to Strategic Insights data.
China contributed the most inflows to mixed asset funds, particularly mixed flexible products, according to Bryan Liu, managing director of global research at Strategic Insight.
He said that last year, the Chinese Securities Regulatory Commission increased the minimum holdings of stocks to 80% from 60% for equity funds, but still allowed mixed funds to hold between 0% and 95% of stocks in any asset class.
“Fund managers, preferring the flexibility to rebalance investments through volatile stock markets, thus focused on launching new mixed (flexible) funds since late 2014.
Meanwhile, many existing equity funds switched their investment objectives to be reclassified as mixed funds to better adapt to the fast-changing markets,” Liu said.
Asia net new fund flows*
| Fund type |
Net new flows YTD to Nov 2015 |
Net new flows 2014 |
| Mixed | 55.7 | (-25.1) |
| Bond | 49.1 | 29.9 |
| Guranteed | 10.5 | (-2) |
| Real estate | 19.7 | 19.1 |
| Other | 13.5 | 2.6 |
| Money market | 280.5 | 211.3 |
| Equity | 106.1 | 37.9 |
| TOTAL | 535.1 | 273.9 |
*Figures in US$bn. Excludes fund of internal funds and funds of hedge funds for all markets except Japan. Source: Strategic Insight, Simfund Global Basic.
Bond inflows were up about $20bn in 2015 to November, which is surprising given the uncertainty and investor caution while awaiting the US interest rate hike.
“The bond markets in Asia are still very local,” Liu explained.
“China, India and Thailand contributed the most new money to bond funds. Some Chinese investors purchased bond funds as one of the defensive moves since the Chinese stock market meltdown in late June. In India and Thailand, popular short-term and ultra-short-term fixed-maturity plans took in a large amount of the money.”
