Balanced funds, as defined by the HKIFA, are products invested in two or more asset classes, for example, mixed asset funds.
Balanced products are often used to offset market volatility. Given the relative market calm coupled with high valuations, balanced fund investment is likely an attempt to hedge the risk of a market correction.
Net sales of balanced funds during the first half of the year were positive at $3.1bn. During the same period in 2016, net sales were in negative territory (-$1.05bn).
Among the different categories of balanced funds, global balanced funds recorded the highest net sales during the first half.
Balanced fund sales (first half of 2017)
|
Balanced funds |
Gross sales |
Net sales |
|
Global |
$5.14bn |
$1.59bn |
|
Asia |
$2.90bn |
$9.22m |
|
Others |
$4.33bn |
$1.50bn |
|
Total |
$12.37bn |
$3.09bn |
Source: HKIFA
Retail fund sales soar
Overall, Hong Kong’s retail fund net sales soared in the first half. They were up 260% to $4.81bn compared to $1.34bn during the same period last year.
The first half net sales also beat the full year net sales of both 2016 ($3.1bn) and 2015 ($3bn), the organisation reported.
“The significant improvement in net sales during the first half of the year is underpinned by the robust performance of various equity and bond markets and improving economic outlook globally,” Arthur Bacci, HKIFA’s chairman, said in a statement.
Equity funds lose
Despite a rally across global equity markets in recent months, equity funds continued to see net outflows, recording net redemptions for 16 months in a row, according to HKIFA.
Gross sales for equity funds totalled $11.5bn during the first half, but net sales continued to stay in negative territory at -$3.78bn.
Net outflows were mainly from China equity funds, despite the MSCI announcement to include A-shares into its emerging markets indices in June, according to HKIFA.
“The category saw strong gross redemptions of $412.9m in June, which is the highest since the A-share market crash in the summer of 2015,” HKIFA said.
Other equity categories that saw huge outflows are Asia (ex-Japan), international and Hong Kong.
Only sector funds recorded positive net sales, which totalled $269m, compared to $123m from last year.
Equity fund sales ($m)
|
|
Net sales |
|
|
Equity funds |
2017 1st half year |
2016 1st half year |
|
Asia Regional (excl. Japan) |
-871.6 |
-999.62 |
|
Asia Regional (incl. Japan) |
-13.85 |
-21.74 |
|
Greater China Region |
-357.98 |
-254.34 |
|
China |
-931.01 |
-628.53 |
|
Japan |
-79.29 |
-34.51 |
|
Hong Kong |
-426.09 |
-60.18 |
|
Asian Single Market (non Japan/China/HK) |
-74.19 |
-114.57 |
|
International |
-703.48 |
-516.18 |
|
European Regional Market (excl. Eastern European Countries) |
-355.28 |
-1,356.43 |
|
European Regional Market (incl. Eastern European Countries) |
-41.32 |
-183.91 |
|
European Single Market |
-23.05 |
-35.41 |
|
North America |
-140.18 |
-161.65 |
|
Global Emerging Markets |
-1.91 |
-32.65 |
|
Eastern Europe Emerging Markets |
-7.44 |
-19.16 |
|
Latin America Emerging Markets |
-16.27 |
-8.07 |
|
Sector Funds |
269.01 |
123.04 |
|
REITs-related Funds |
-3.24 |
-7.11 |
|
Total |
-3,777.17 |
-4,311.02 |
Source: HKIFA
Resilient bond funds
Bond funds continued to be the most popular category across all fund types, a trend seen since the beginning of 2016. However, net sales fell 15% to $5.6bn.
High-yield bond funds had the strongest net sales of $2.4bn during the first half, beating its full year 2016 figure of $1.5bn.
On the flipside, the US bond category is the only one with net outflows.
Bond fund sales ($m)
|
|
Net sales |
|
|
Bond funds |
2017 1st half year |
2016 1st half year |
|
Global |
996.73 |
3,944.27 |
|
US |
-43.21 |
154.11 |
|
Europe |
17.55 |
334.69 |
|
Asia |
1,922.32 |
2,071.64 |
|
Emerging Markets |
247.85 |
-1.21 |
|
High Yield |
2,439.37 |
11.55 |
|
Total |
5,580.61 |
6,515.06 |
Source: HKIFA
