The report covers transactions in funds authorised by the Securities and Futures Commission for sale in Hong Kong that were conducted through retail banks, independent financial advisors, insurance companies and direct clients with a registered address in Hong Kong, according to HKIFA.
Mixed-asset funds, which provide exposure to equities, bonds and other asset classes, are often used to offset market volatility. Given the relative market calm during the year coupled with high valuations, investors’ actions likely reflected an attempt to hedge the risk of a market correction.
Among the different categories of mixed-asset funds, global funds recorded the highest net sales during the year.
Mixed-asset fund sales in 2017
|
Fund category |
Net sales |
| Global |
$1.82bn |
|
Asia |
$899m |
|
Others |
$3.03bn |
| Total |
$5.75bn |
Source: HKIFA
Despite last year’s global equity market rally, equity funds sold in Hong Kong recorded a prolonged period of monthly net redemptions. The redemptions continued for 22 months in a row, December 2017 data compiled by HKIFA shows.
Funds investing in Asia ex-Japan and China stocks were the major driver of the redemptions, accounting for $1.86bn and $1.87bn of outflows, respectively.
The optimism in Hong Kong and China stock market in 2017 did not attract more assets to flow into equity funds. Their net sales remained in the negative territory throughout the year. Moreover, China equity funds notably posted the largest annual net outflows, which totalled $1.87bn. Regional funds investing in Asia ex-Japan equity reported second largest outflows.
Over the same period, only sector equity funds gained net new assets from investors.
Equity fund sales in 2017
|
|
Net sales ($) |
|
|
Equity funds |
2017 |
2016 |
|
Asia Regional (excl. Japan) |
-1.86bn |
-1.24bn |
|
Asia Regional (incl. Japan) |
-31m |
-44.3m |
|
Greater China Region |
-819.5m |
-511.4m |
|
China |
-1.87bn |
-1.37bn |
|
Japan |
-110.6m |
-113.5m |
|
Hong Kong |
-784m |
-230.4m |
|
Asian Single Market (non Japan/China/HK) |
-395.4m |
-237.9m |
|
International |
-876.8m |
-1.23bn |
|
European Regional Market (excl. Eastern European Countries) |
-365.11m |
-3.08bn |
|
European Regional Market (incl. Eastern European Countries) |
-72,57m |
-375.3m |
|
European Single Market |
-15.28m |
-87.8m |
|
North America |
-209.4m |
-285.07m |
|
Global Emerging Markets |
-145.7m |
6.85m |
|
Eastern Europe Emerging Markets |
-109.5m |
-13.4m |
|
Latin America Emerging Markets |
-59.7m |
-32.4m |
|
Sector Funds |
361.37m |
513.35m |
|
REITs-related Funds |
-17.22m |
9.24m |
|
Total |
-7.38bn |
-8.22bn |
Source: HKIFA
Bond sales flat
Net sales of fixed income funds in Hong Kong stagnated in 2017, growing by 0.7% compared to 2016 which was a strong year for bond funds.
The total net sales of bond funds reached $10.6bn in 2017, compared to $10.68bn in 2016. Funds investing in Asia bonds, which posted net sales of $3.83bn last year, have now overtaken the global bond funds to be the category that gained most new assets. High yield bond funds also attracted significant inflows, $2.22bn in 2017, up 42.9% from 2016.
Bond fund sales in 2017
|
|
Net sales ($) |
|
|
Bond funds |
2017 |
2016 |
|
Global |
3.18bn |
5.31bn |
|
US |
98.9m |
73.6m |
|
Europe |
447.7m |
110.08m |
|
Asia |
3.83bn |
3.16bn |
|
Emerging Markets |
826.9m |
477.52m |
|
High Yield |
2.22bn |
1.54bn |
|
Total |
10.6bn |
10.68bn |
