Assets flowing into Hong Kong-domiciled funds have shrunk over the 12 months as at the end of March 2022, according to the Securities and Futures Commission’s (SFC’s) annual report.
The net subscription for the year ended 31 March was $12.4bn, down from $16.5bn the year before.
Conventional asset classes such as bonds and equities suffered the most, according to the report.
Fixed income funds bled $4.39bn for the year, reversing an inflow of $8.4bn in the prior fiscal year.
The watchdog noted the financial distress faced by some mainland property developers last year and conducted stress tests to access brokers, dealers and fund managers’ exposure to the sector.
In a coordinated enquiry with the Hong Kong Monetary Authority, the SFC also obtained information from intermediaries about their clients’ outstanding positions in, and selling practices concerning, a major developer’s bonds, but the name was not disclosed.
Equity funds also reported $506m in net redemption, compared with an inflow of $2.36bn for the year ended 31 March 2021.
During times of volatility, mixed funds and index funds were more popular among investors.
The former posted a net inflow of $3.16bn, as at the end of March 2022, compared with a $238m outflow a year ago, while the latter reported a 180% increase year-onryear, to $13.7bn.
Hong Kong domiciled fund flows ($m)
| 12 months to 31 March 2022 | 12 months to 31 March 2021 | |||||
| Subscription | Redemption | Net flow | Subscription | Redemption | Net flow | |
| Bond | 12,169 | 16,563 | (4,394) | 24,805 | 16,411 | 8,394 |
| Equity | 20,714 | 21,220 | (506) | 24,441 | 22,083 | 2,358 |
| Mixed | 12,774 | 9,619 | 3,155 | 9,867 | 10,105 | (238) |
| Money market | 19,290 | 18,842 | 448 | 18,870 | 17,794 | 1,076 |
| Feeder funds | 3 | 2 | 1 | 26 | 2 | 24 |
| Index | 49,752 | 36,054 | 13,698 | 39,103 | 34,210 | 4,893 |
| Guaranteed | 0 | 6 | (6) | 0 | 12 | (12) |
| Total | 114,702 | 102,306 | 12,396 | 117,112 | 100,617 | 16,495 |
SFC authorised 166 collective investment schemes (CIS) for the year ending 31 March 2022, including 152 unit trusts and mutual funds, with 75 domiciled in Hong Kong.
A total of 187 unlisted structured investment products were also authorised for public offering, according to the annual report.
As of 31 March, the net asset value of Hong Kong-domiciled authorised funds totalled $178.6bn, down 6.4% year-over-year, from $190.1bn.
Despite nine more bond funds being offered, the total NAV dropped $837m to $30.93bn by end of March.
On the other hand, equity saw a decrease in NAV by $865.4m to $55.6bn, but remained the largest asset class by NAV.
Hong Kong domiciled fund
| As at 31 March 2022 | As at 31 March 2021 | |||
| Number | Total NAV ($m) | Number | Total NAV ($m) | |
| Bond | 174 (24.1%) | 30,925 (17.3%) | 165 (24%) | 39,395 (20.6%) |
| Equity | 199 (27.5%) | 55,601 (31.1%) | 201 (29.2%) | 64,255 (33.7%) |
| Mixed | 110 (15.2%) | 33,402 (18.7%) | 109 (15.8%) | 33,030 (17.3%) |
| Money market | 37 (5.1%) | 9,548 (5.3%) | 33 (4.8%) | 8,424 (4.4%) |
| Feeder funds | 41 (5.7%) | 23 (0%) | 37 (5.4%) | 28 (0%) |
| Index | 161 (22.3%) | 49,102 (27.5%) | 142 (20.6%) | 45,727 (24%) |
| Guaranteed | 1 (0.1%) | 41 (0%) | 1 (0.1%) | 52 (0%) |
| Sub-total | 723 (100%) | 178,642 (100%) | 688 (100%) | 190,909 (100%) |
| Umbrella Structures | 143 | 147 | ||
| Total | 866 | 835 |
As of 31 March 2022, a total of 2,849 SFC-authorised CIS were on offer to the public, including 866 Hong Kong domiciled and 1,381 non-Hong Kong domiciled unit trusts and mutual funds, according to the report.
