FSA’s Fund Selector Asset Class Research is a quarterly survey of fund buyers in the three Asian financial centres. FSA asks participants to state their intentions around asset allocation in 26 asset classes and fund categories in the coming 12 months.
The respondents polled in June 2017 indicated a higher interest in index-tracking products, most of which are exchange-traded funds (ETFs), than those polled three months earlier.
Intentions for asset allocation to index-tracking products in the next 12 months
Data: FSA
While in March, only 17% of participants told FSA they would increase their allocation to index-tracking products, in June the number doubled to 34%. The number of those who want to reduce their allocation or don’t use ETFs in their portfolios remained approximately the same.
Over the last 12 months, ETFs in Hong Kong experienced mostly net outflows while actively-managed mutual funds saw net inflows, according to data from Morningstar. Nevertheless, the net outflows from ETFs have been diminishing, after the peak in January 2017, as illustrated in the chart.
Asset flows for Hong Kong-domiciled ETFs and mutual funds, in US dollars
Data: Mornigstar, excluding money market funds
In Singapore, the trend is less obvious, with both active and passive funds seeing high inflows in March and April 2017, and a decline in May and June.
Asset flows for Singapore-domiciled ETFs and mutual funds, in US dollars
Data: Morningstar, excluding money market funds
The asset flow data presented here illustrate only general trends, but cannot be interpreted as actual money flows into funds from investors in Hong Kong or Singapore.
Mutual funds domiciled abroad (mostly in Luxembourg and Ireland) and available for sale in Hong Kong do not report asset flows generated in the territory, or any other specific region of sale, but only the aggregate totals.
To estimate asset flows for mutual funds in Hong Kong, FSA used data for funds domiciled in Hong Kong and those domiciled in Luxembourg or Ireland with Hong Kong as their primary region of sale. For ETF flows, FSA used the data for products domiciled in Hong Kong.
The same considerations apply to Singapore data and the same method was used.
