It’s been a rough year for Hong Kong, with ongoing anti-government protests and an economy that has slipped into recession.
But as a portfolio manager might say, the SAR’s politics and economy are uncorrelated with its mutual fund sales.
The latest year-to-date figure for net sales of mutual funds – $15.4bn – has surpassed the record high of $14bn in 2012, according to latest data from the Hong Kong Investment Funds Association.
That makes 2019 the best year for mutual fund sales in Hong Kong since the HKIFA began reporting sales in 1999.
Net sales have been increasing each quarter in 2019, even as anti-government protests escalated, dissuading tourists and business travelers from visiting and eventually hitting economic growth.
Q3 net sales of mutual funds sold in Hong Kong reached $5.2bn, which is higher than the $4.9bn in Q2 and $3.7b in Q1.
Then in October, net inflows continued with $1.51bn for the month, bringing total net subscriptions this year to $15.4bn.
SFC-authorised funds sold in Hong Kong
| Period |
Net inflow/outflow ($bn) |
| Jan-Oct 2019 |
15.4 |
| 2018 |
-0.512 |
| 2017 |
8.9 |
| 2016 |
3.1 |
| 2015 |
2.9 |
| 2014 |
12.5 |
| 2013 |
10.3 |
| 2012 |
14 |
| 2011 |
6.2 |
| 2010 |
6.2 |
| 2009 |
2.5 |
Source: HKIFA
FMP popularity
Of the different fund categories, fixed income funds were the most popular among investors, with inflows of $24.6bn.
On the flipside, the equity and mixed-asset fund categories each had net outflows of around $4.3bn, according to HKIFA data.
Fixed maturity products were among the most popular funds in Hong Kong this year. Five FMPs that were launched in the SAR attracted around $1.55bn from investors as of the end of September, according to a recent Cerulli Associates report. After September, seven more FMPs were launched in Hong Kong.
During the third quarter this year, two of the best-selling products in Hong Kong were FMPs, according to data provided by Broadridge Financial.
Top 10 funds sold in Hong Kong with the most net inflows
| Fund Name | Fund Sector |
Net flows Q3 ($m) |
| JPMorgan Global Bond Fund | Bonds Global Currencies |
382.0 |
| HSBC GIF Global High Income Bond | Bonds Global Currencies |
349.0 |
| Invesco Global Bond Fixed Maturity 2022 | Bonds Target Maturity |
299.9 |
| JPMorgan Asian Total Return Bond | Bonds Asia Hard Currencies |
264.2 |
| Invesco Global Bond Fixed Maturity Fund 2022 – II | Bonds Target Maturity |
254.9 |
| CSOP Hang Seng Index Daily (-2x) Inverse Product ETF | Equities Alternative Inverse/Leverage |
197.9 |
| Hang Seng H-Share Index ETF | Equities China |
160.4 |
| iShares Core MSCI China Index ETF | Equities China |
142.1 |
| Global X China Biotech ETF | Equities Theme Biotechnology |
135.3 |
| Sun Life MPF Rainbow Scheme – Conservative Fund | Money Market HKD |
124.3 |
Source: Broadridge Financial
Yoon Ng, Broadridge’s Singapore-based director for Asia global intelligence, noted that China equity ETFs were also among the top 10 most selling products, adding that most of their buyers were institutions.
Apac fund inflows
The year has also been good for the mutual fund industry in other Asia-Pacific markets.
During the first nine months, total net sales of mutual funds in the region reached $221bn, with around 40% of the inflows coming in the third quarter, according to a separate Broadridge report.
The figure only includes six markets that Broadridge covers, which are Australia, China, Hong Kong, Japan, Singapore and Taiwan.
“This third quarter saw one of the region’s best sales [numbers] in the past four years, surpassed only by the fourth quarter of 2018,” Ng said in the report.
Inflows during the third quarter were driven largely by China, which had net subscriptions of $39bn, followed by Australia ($14bn) and Taiwan ($12bn) according to the report.
Broadridge noted that bond funds drove sales in all of the six markets it covers, accounting for about 76% of the region’s inflows during the third quarter.
“Against the backdrop of trade tensions and slowing economic growth across much of the region, investors are likely to focus on income and wealth preservation,” Ng said.
