Rebounding popularity of Hong Kong and single country Asian funds resulted in record gross and net sales of unit trusts during the first quarter, the Hong Kong Investment Funds Association (IFA) announced yesterday. Gross sales topped US$1.9 billion - a rise of 56 per cent compared with the same period last year - while net sales jumped to a record high of $667 million. Redemptions totalling $1.2 billion were the highest since the first quarter of 1994. Hong Kong and single Asian country funds accounted for more than 74 per cent of net inflows and 44 per cent of gross sales during the first quarter. While the figures are meant to reflect the activity of Hong Kong retail investors it is generally understood that institutional and overseas sales are included in some members estimates. Major houses, such as Jardine Fleming and Schroder Investments, said that local demand for Greater China Funds - those investing in mainland, Hong Kong and Taiwanese stocks - posted the biggest demand. Schroders said that European funds - excluding Britain - were increasingly popular while Jardine has experienced increased demand for its international funds. IFA vice-chairman Peter Lord said: 'We note that strong inflows were consistently recorded in all three months. It is the first time for the industry to record gross inflows of more than $600 million for three consecutive months.' The rise in United States interest rates was largely anticipated with the market posting only modest consolidation. About half the sectors monitored by the IFA recorded outflows during the month with the biggest losers being Japan single country, regional and warrant funds. The turnaround in sentiment for equities was evidenced by a $2.8 million outflow of funds from cash funds. Mr Lord added: 'One interesting anomaly is that while single Asian funds registered strong inflows, all three Asian regional fund sectors registered outflows in the quarter.'