Hong Kong’s asset and wealth management sectors reported an AUM of HK$35.55trn ($4.56trn) in 2021, according to the Asset and Wealth Management Activities Survey by the Securities and Futures Commission (SFC).
While this represents a 2% increase year-on-year, the growth rate has tumbled from 21% in 2020.
By the end of last year, AUM for licensed corporations and registered institutions increased year-on-year by 8% to HK$25.89trn, while AUM for private banking and private wealth management business recorded a year-on-year decrease of 6% to HK$10.58trn.
The SFC said the decrease is due to changes in the values of underlying investments held by clients.
In 2021, the city reported net fund inflows of HK$2.15trn, representing a 6% year-on-year increase from HK$2.04trn in 2020.
Over the year, the number of Hong Kong-domiciled SFC-authorised funds increased by 7% year on-year to 865.
The net asset value increased by 5% year-on-year to HK$1.50trn, with the overall net inflows amounting to HK$121bn.
Rise of retail investors
By client type, professional investors including corporations, governments, family offices and institutions accounted for 69% of Hong Kong’s asset management and fund advisory business.
The AUM attributable to professional investors increased 3% year-on-year from HK$17.14trn to HK$17.70trn, mainly contributed by corporations, financial institutions and funds.
Yet the AUM attributable to non-professional investors, including retail investors, jumped 19% year-over-year to HK$7.95trn in 2021, from HK$6.66trn in 2020.
This represents 31% of the whole asset management and fund advisory business in 2021, compared with 28% in the previous year.
Public funds, including both SFC-authorised funds and those from other jurisdictions, continue to be the largest category within the business, accounting for 37% of the business in Hong Kong in 2021.
It is followed by managed accounts (31%) and private funds (17%), including hedge funds, private equity and venture capital.
In June 2021, SFC issued a circular to provide guidance to management companies of SFC-authorised unit trusts and mutual funds on enhanced disclosures for funds which incorporate ESG factors as a key investment focus.
As of end-March, there were 121 SFC-authorised ESG funds with a total AUM of $142.7bn.
This represents a year-on-year increase of 2.7 times in terms of number and 1.9 times in total AUM, the SFC noted.
The number of SFC-authorised ESG funds has further reached 135 as of 30 June.