Posted inFund news

Capital flows out of Greater China funds in 2016

About $8.3bn left Greater China equity funds last year, with global cross-border products showing the most outflows, according to Morningstar data.

For the full year 2016, global cross-border funds (products for sale in multiple jurisdictions) bled $7.1bn while funds domiciled in Hong Kong and Singapore had $1.2bn in net outflows, according to Morningstar data.

There are 61 funds domiciled in the SAR and the Lion City, and also 61 global cross-border funds, according to Morningstar data.

In total, the 122 Greater China funds had net outflows of $8.3bn during 2016. 

The top five funds that saw the most net outflows is consistent with the broader data, with all of them being global cross-border funds. 

The outflows were huge, with some accounting for more than half of the current fund size.


Highest net outflows – Greater China

Fund name Domicile AUM Net outflows 3-yr annualised return
Fidelity China Focus Luxembourg $3.5bn $1bn 4.50%
Schroder ISF Hong Kong Equity  Luxembourg  $2.6bn  $841.3m  0.33% 
GAM Star China Equity  Ireland  $832.9m  $687.1m  -4.48% 
Robeco Chinese Equities  Luxembourg  $307.4m  $618.7m -1.22% 
First State China Growth  Ireland  $3.7bn  $577m  -3.35% 
Source: Morningstar


On the flipside, four of the top five funds that had the highest net inflows during the year are domiciled in Hong Kong, with the JPMorgan SAR Hong Kong Fund attracting the most capital.


Highest net inflows – Greater China

Fund name Domicile AUM Net inflows 3-yr annualised return
JPMorgan SAR Hong Kong Hong Kong $779.3m $184.6m -1.06%
BOC-P HK Equity Provident Hong Kong $1.3bn $80.5m 0.72%
Manulife GF Dragon Growth Luxembourg $204.5m $59.4m -0.98%
BEA Union Investment Greater China Growth Hong Kong $180.5m $22.9m -1.83%
Schroder China Equity Alpha Hong Kong $99.7m $20.3m 17.54%
Source: Morningstar

Adding other Asian geographies — Indonesia, Malaysia, Philippines, Singapore, Taiwan, Thailand — results in 203 Greater China funds available for sale. 

But only two cross-border funds made it into the top 20 funds that saw net inflows, according to Morningstar data. The majority of those top 20 funds are domiciled in Taiwan (13 funds), followed by Hong Kong (5).

Taking the same sample of funds, 16 out of 20 funds that saw the biggest outflows are cross-border funds.

A closer look

Did allocation matter in attracting capital last year? A closer look reveals there are some sector weighting differences between the funds gaining and losing capital, according to data from FE Analytics.

Generally, the top five funds had higher exposure to financials sector than the bottom five.

However, broadly speaking, most funds had the majority of the portfolio allocated to either financials or telecom, media and technology (TMT) companies.

Funds that saw biggest inflows Top 3 sector weightings Funds that saw biggest outflows Top 3 sector weightings
JPMorgan SAR Hong Kong

Financials (48.4%), TMT (13.4%), Industrials (9.1%)

Fidelity China Focus Financials (30.5%), Consumer Products (18%), Basic Materials (17.1%)
BOC-P HK Equity Provident 

Financials (50.1%), TMT (17.9%), Industrials (10.1%)

Schroder ISF Hong Kong Equity  Financials (24.93%), TMT (18.68%), Consumer products (18.31%) 
Manulife GF Dragon Growth  TMT (29.12%), Financials (23.09%), Consumer products (13.78%) GAM Star China Equity Financials (26.16%), Consumer products (20.99%), TMT (16.26%) 
BEA Union Investment Greater China Growth  Financials (36.26%), TMT (24.39%), Consumer products (14.4%)  Robeco Chinese Equities TMT (35.84%), Financials (22.1%), Consumer products (13.45%) 
Schroder China Equity Alpha  TMT (23.23%), Industrials (15.07%), Financials (15.04%) First State China Growth  Consumper products (32.1%), TMT (24%), Healthcare (14%) 
Source: FE Analytics


In terms of full year 2016 performance, the majority of funds had negative returns, with a few exceptions.


Top five funds with biggest net inflows






Top five funds with the biggest net outflows




Part of the Mark Allen Group.