After a quick comparison of the landscape of mutual funds and ETFs domiciled in Hong Kong and Singapore, FSA took a snapshot of the evolution of Hong Kong-domiciled funds over the last ten years, using data from Morningstar.
Functioning as a “gateway to China”, Hong Kong supports a broad and ever-growing selection of China and Greater China funds.
While ten years ago, there were only ten Greater China equity funds domiciled in the SAR, today the number is 97, of which 50 are index funds (almost all exchange-traded funds). Their number grew quite steadily since late 2009. Today they account for 53% of AUM of all funds domiciled in the SAR.
Number of mutual funds and ETFs domiciled in Hong Kong
Data: Morningstar, 30 June 2017, only funds with reported AUM were counted
The Asia fixed income sector is the second largest category of funds domiciled in Hong Kong, with 45 products. The number has not grown significantly since the late 2014, after several new products were launched in the early 2014.
Starting in early 2015, the SAR saw the growth in the number of multi-asset or allocation funds coming to the market. The category numbers 41 funds now, up from only 14 in 2014.
The past year has seen the advent of leveraged and inverse ETFs, which is the fastest growing category by the number of products, since they were first allowed in the early 2016. Today, the Hong Kong Stock Exchange lists 30 of them. In addition, the exchange lists 106 non-L&I ETFs.
The top providers of funds domiciled in Hong Kong are: BOCI-Prudential, with 44 funds, JP Morgan with 39 and Hang Seng with 27.
JP Morgan, however, leads the pack by AUM in Hong Kong-domiciled funds, with $20.2bn of assets as of 30 June. Hang Seng has $12.3bn in its two top ETFs, and State Street, $11.9bn, almost all of it in the Tracker Fund of Hong Kong.
ETFs constitute around one-third of products domiciled in Hong Kong today. Their share of AUM has been hovering around 40%, after peaking at 54% in the late 2012.
Index funds (ETFs) vs mutual funds domiciled in Hong Kong
By number of products, all fund types are growing, but the share of ETF assets are declining.
Data: Morningstar, 30 June 2017, AUM in US dollars.
