Posted inFund Flows

Hong Kong funds continue to see outflows

Fixed income funds domiciled in Hong Kong lost one-third of assets year-over-year, according to data from the market’s watchdog.
Drone view of Hong Kong city, sea, kowloon city and Hong kong harbor

The assets of most Hong Kong-based funds fell over the last year, according to the Securities and Futures Commission’s (SFC’s) latest quarterly report.

The net asset value (NAV) of funds domiciled in the city was $169.67bn as at the end of June, marking a 15.3% reduction year-over-year, or 5% quarter-over-quarter.

All major asset classes have recorded losses over the past year, SFC data found.

Bond funds suffered the most, with NAV plunging 33.3% year-over-year to $27.07bn this June, from $40.61bn at end of June 2021.

Following these changes, mixed funds have taken over as the third largest asset class among all Hong Kong domiciled funds.

Despite recording a 15.6% decrease in NAV year-over-year, mixed funds posted a total NAV of $30.04bn as at the end of June 2022.

Equity funds, meanwhile, the second largest asset class among Hong Kong-domiciled funds, also had a tough year over the past 12 months.

The asset class recorded a 25.3% drop in NAV over the period to $50.38bn, falling from $67.45bn at the end of June 2021.

The only two asset classes to record increases in assets were money market funds and index funds, including ETFs, leveraged and inverse products.

Index funds remain the largest asset class in terms of NAV, with a total value of $52.30bn as at end of June, increasing 9.3% from $47.86bn a year earlier.

On the other hand, money market funds reported a 12% year-over-year increase in NAV to $9.83bn, but the growth has slowed to 2.9% when compared with the NAV from the first quarter of this year.

Overall, Hong Kong-domiciled funds reported overall net inflows of $0.5bn during the most recent quarter.

Fund authorisations

Between April and June this year, the regulator authorised 35 unit trusts and mutual funds, including 17 Hong Kong-domiciled funds.

Since Stock Connect’s launch on 4 July, the watchdog also approved four ETFs for trading: CSOP Hang Seng TECH Index ETF; iShares Hang Seng TECH ETF; Hang Seng China Enterprises Index ETF; and Tracker Fund of Hong Kong.

Part of the Mark Allen Group.