On an industry-wide basis, gross sales dropped in the third quarter by 19% compared with Q2 to US$16.2bn. But, the industry still managed to register net inflows of US$235.86m.
The drop during the third quarter was primarily due to the lackluster sales of bond funds, which witnessed net outflows for four consecutive months since June.
Equity score card
Out of the 16 equity categories, eight registered net inflows in the third quarter, with international equity funds faring the best pulling in US$1.3bn. This was followed by European regional market (excluding Eastern Europe) funds, but with much smaller inflows, at US$357m only.
Of the eight sectors that saw net outflows, China equity funds were the worst hit with US$239m outflows followed by Asian single market (ex Japan/China/HK) equity funds with US$137m of outflows.
Lieven Debruyne, chairman of the HKIFA said: “Q3 saw a fundamental shift in demand from bond funds to equity funds. Uncertainty in markets, initially caused by the Fed announcement regarding tapering of their bond buying program, has made investors more wary regarding the return prospects of bond funds.
“At the same time, equity markets, especially developed equity markets, continued to show strong performance. This resulted in stronger demand for equity funds compared to previous quarters.”
Bond funds barometer
Compared with the the second quarter, gross sales of bond funds dropped by almost 50% to US$4bn.
During the period under review, five of the six bond sectors saw a drop in gross sales and registered net outflows. The global bond funds category witnessed the highest net outflows, at US$1.5bn, followed by emerging market bond funds, which pulled out US$605m.
Only European bond funds managed to register an increase in gross sales and saw net inflows, albeit meager (US$0.35m).
Balanced funds witnessed gross inflows of US$4.7bn and net inflows of US$1.2bn in Q3. But compared with Q2, gross sales and net sales had shrunk by 33% and 69% respectively.
