Mutual funds available for sale in Hong Kong or Singapore posted $13.5bn in net inflows for the third quarter of 2021, accounting for a 65.4% drop quarter-over-quarter.
There was an especially significant decline in inflows into equity funds, which dropped to $11.7bn in the third quarter from $27.5bn in the quarter before. Since the beginning of the year, equity funds recorded a total inflow of $91.6bn.
On the other hand, fixed income funds reported a net inflow of $1.4bn from July to September. But it was still insufficient to reverse the $6.4bn net outflows in the first quarter. Since January, fixed income funds in Hong Kong and Singapore reported a net withdrawal of $4.6bn.
Money market funds, which are typically used as a near-term cash-management tool, bled $10.1bn over the last quarter.
Cross-border funds, meanwhile, continued their run of net inflows for the last six consecutive quarters. Nonetheless, the fund flows stalled in the past quarter as inflows slowed.
When comparing across categories, moderate-allocation funds, which is a portfolio with 50% to 70% AUM in equities and the remainder in fixed income and cash, was the most popular category among Hong Kong and Singapore investors in this period. They led the field for two consecutive quarters in terms of net inflows, with $5.1bn during the last quarter.
The data also shows investors continue to bet on global large-cap growth equity ($4.6bn), thematic portfolios investing in technology stocks ($3.8bn) and alternative energy sectors ($2.7bn) for the third quarter of the year.
During the same period, market sentiment turned sour towards the China’s property sector due to the liquidity crunch and ongoing regulatory consolidation, resulting in net withdrawals in China equity ($2.6bn), Asia ex-Japan equity ($1.9bn), and China equity – A Shares ($1.1bn).
Pictet led its peers in terms of net inflows for the third quarter with $9.1bn, which was boosted by its robotics fund and clean energy fund which absorbed $3.5bn and $2.3bn, respectively, over the period.
It was followed by Allianz Global Investors ($3.3bn) and Schroders ($2.7bn) for net inflows from July to September.
Impeded by the capital loss in money market funds, Goldman Sachs, HSBC, and State Street were the laggards for the third quarter of 2021 in terms of net inflows, with $4.5bn, $2.2bn, and $1.8bn in net withdrawals respectively.
Hong Kong and Singapore Fund Flows Q3 2021
| Sector | Net assets ($bn) Sep 2021 | Market share % Sep 2021 | Net flows ($bn) 1 month | Net flows ($bn) Year to date | Net flows ($bn) 1 year |
| Equity | 1185.2 | 50.2 | 6.08 | 91.64 | 139.08 |
| Fixed income | 782.5 | 33.2 | (1.69) | (4.60) | 21.67 |
| Allocation | 240.9 | 10.2 | 4.09 | 24.39 | 22.95 |
| Alternative | 26.0 | 1.1 | (0.06) | 3.59 | 4.14 |
| Convertibles | 8.0 | 0.3 | (0.16) | 0.46 | 0.84 |
| Commodities | 2.7 | 0.1 | (0.12) | 0.98 | 0.95 |
| Miscellaneous | 0.1 | 0.0 | 0.00 | (0.01) | (0.02) |
| All long term | 2245.4 | 95.2 | 8.14 | 116.46 | 189.60 |
| Money market | 113.3 | 4.8 | (2.63) | (24.22) | (17.69) |
| Total | 2358.7 | 100 | 5.5 | 140.7 | 171.9 |
