Mutual funds investing in Hong Kong stocks have been the region's top performers during the past year, a survey reveals. The sector has averaged about 16 per cent, while most of its Asian single-country fund rivals have posted losses, a review by the Hong Kong Investment Funds Association (HKIFA) says. The Thai equity fund sector has dropped nearly 14 per cent, Korean funds are down 11 per cent, Indonesia is off 6 per cent and Singapore and Malaysian funds are down about 3 per cent. China funds, which have out-performed during the past three months, are up 3 per cent over one year and 14 per cent on a year-to-date basis. There are wide variations in performance within the Hong Kong sector with small, boutique operations sharing performance laurels with the financial conglomerates, such as HSBC Asset Management. For example, during the past year Value Partners has produced the top-performing fund by investing in smaller company stocks. According to Micropal, the statistics company, the fund has returned more than 33 per cent over 12 months. No 2 is HSBC Asset Management's Hong Kong Fund with a return of more than 28 per cent. This fund typically invests in the territory's blue-chip stocks. HKIFA chairman Andrew Lo attributed the strong performance of the local market to better liquidity and an improving economy. He said Hong Kong was usually the key beneficiary of liquidity into the Asian markets. 'In addition, signs that China is introducing some easing of credits and the general improving economic climate in the Chinese economy helped the local market to maintain resilience.' The HKIFA is a trade association comprising 45 fund management groups and 34 associate members, including trustees and other professionals. The funds surveyed are authorised for sale in the territory.