bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

sponsorType

authorLocations

authors

paywallTypes

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

factSheets

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

copyrighted

customTimezone

liveContents

SCMP Reporter

NOT too long ago, the average Hong Kong Chinese investor did not own unit trusts.

Funds were considered investment vehicles for expats. The local Chinese community preferred to speculate on property, punt on the stock market or hoard gold.

Times have changed in the past five or six years.

The number of local Chinese investors who own unit trusts has grown.

'Chinese investors have recognised the benefits of investing in a well-managed unit trust,' said David Lui, Schroders Investment Services director.

'Many people have come to me and told me that the stocks they had bought could not match the performance of our funds.' Many local investors are aware of the importance of having a balanced portfolio and realise unit trusts are an excellent way to diversify assets.

They can choose from a range of funds invested in stocks, bonds and currencies.

'They know more about the local market so they tend to still buy local stocks. But, when it comes to stock markets outside Hong Kong, about which they are not too familiar, then they prefer to buy funds invested in those markets,' said Cynthia Liu, Jardine Fleming director of investment services.

  Despite the recent growth in the number of Chinese investors, there is still a long way to go before the majority of local investors own unit trusts.

 Currently, only about seven per cent of the local population has invested in funds.

 As a result, there is still a huge market potential out there for fund management companies.

'I think the local Chinese investors are realising the benefits of mutual funds and are stepping back and saying: 'I'm not just a speculator', ' said Lisa Popick, Fidelity Investments Management marketing director.

'They are also recognising the benefits of diversification in a number of areas. There are more things out there than just pure stock plays and there is also room for bonds and money funds. It's important to build a diversified portfolio,' she said.

Some industry insiders believe that the figure could be much higher than seven per cent.

 But they argue that a large number of local Chinese investors are dissuaded from unit trusts because too many companies are offering them the wrong products.

'Most people in the industry think that local Chinese investors want high-risk, high-volatility funds and the chance to switch from fund to fund. But our experience shows this is not the case,' said Stewart Aldcroft, Templeton director.

'According to our feedback, investors don't want companies to keep telling them to buy this fund and switch to that one.

'Investors are fed up with that sort of advice because they have been following it for a long time and they have not made as much money as they might have done if they had just kept their money in one fund over the same period.'  He said that with so many funds available, many investors were confused about unit trusts.

       This is why it made sense to put money into a regional or global fund, leave it there for a few years and let the fund manager make decisions on when it was best to move in and out of markets.



Hong Kong Chinese changing direction on investment front