Northbound (Hong Kong domiciled) funds distributed through the MRF had large outflows of RMB 1.53bn ($216.7m) in March and lost RMB 906.6m in the first quarter.
In contrast, southbound funds (mainland-domiciled funds sold in Hong Kong) saw inflows of RMB 16.5m ($2.34m) during volatile March and collected RMB 59m in the first quarter of this year, according to the latest data from the State Administration of Foreign Exchange (Safe).
The March fund flow numbers are the reverse of the performance in February, when northbound funds reported inflows of RMB 1.03bn while southbound funds lost RMB 21.18m.
In fact the first-quarter performance is also contrary to typical flow patterns. During the same quarter in 2019, northbound fund flows (RMB 528m) dwarfed southbound flows (RMB 14.7m), as investors opted for the more global exposure provided by the Hong Kong domiciled instruments.
The same pattern played out during full year 2019, when net sales for northbound funds reached RMB 7.16bn while southbound funds had net outflows of RMB 168.4m.
CSRC approval
Since the MRF began in 2015, 23 northbound products from 12 firms have been approved by China’s regulator, according to CSRC records.
In February this year, the CSRC approved six funds under the MRF scheme, which includes the Amundi Disruptive Opportunities Equity Classic Fund, the JP Morgan Asia Growth Fund, the Pictet Strategic Income Fund and three products from HSBC Global Asset Management.
Last year, the CSRC approved only five Hong Kong-domiciled products for mainland distribution.
Looking at southbound funds, the Securities and Futures Commission has approved around 50 China-domiciled funds to be sold in Hong Kong, but only two dozen funds have been made available to investors, FSA previously reported.
Northbound fund flows
| Monthly net flows in RMB | Total net inflows in RMB* since the scheme started | |
| Jan-19 | (884m) | 8.14bn |
| Feb-19 | 75.5m | 8.22bn |
| Mar-19 | 1.34bn | 9.55bn |
| Apr-19 | 976.3m | 10.53bn |
| May-19 | 969.7m | 11.50bn |
| Jun-19 | 1.45bn | 12.95bn |
| Jul-19 | 2.45bn | 15.39bn |
| Aug-19 | 466m | 15.86bn |
| Sep-19 | 803m | 16.66bn |
| Oct-19 | (111.7m) | 16.55bn |
| Nov-19 | 87.4m | 16.64bn |
| Dec-19 | (455.1m) | 16.18bn |
| Jan-20 | (407.1m) | 15.78bn |
| Feb-20 | 1.03bn | 16.8bn |
| Mar-20 | (1.53bn) | 15.3bn |
Source: Safe. *Figure at the end of the month
Southbound fund flows
| Monthly net flows in RMB | Total net inflows in RMB* since the scheme started | |
| Jan-19 | (3.47m) | 429.16m |
| Feb-19 | 6.01m | 435.18m |
| Mar-19 | 12.14m | 447.32m |
| Apr-19 | (79.01m) | 368.32m |
| May-19 | (39.70m) | 328.62m |
| Jun-19 | (28.66m) | 299.96m |
| Jul-19 | 2.06m | 302.01m |
| Aug-19 | (20.52m) | 281.50m |
| Sep-19 | (10.57m) | 270.93m |
| Oct-19 | (4.63m) | 266.29m |
| Nov-19 | (2.09m) | 264.20m |
| Dec-19 | 970,000 | 265.17m |
| Jan-20 | 63.69m | 328.86m |
| Feb-20 | (21.18m) | 307.68m |
| Mar-20 | 16.51m | 324.19m |
