Retail sales of unit trusts investing in Hong Kong stocks topped US$56 million during 'Red October' despite heavy redemptions in other regional sectors, according to the Investment Funds Association. Some unit trust companies were sceptical about net domestic sales despite association assurances they excluded institutional sales and had not boosted performance by mistakenly accounting sales in Hong Kong rather than United States dollars. Jardine Fleming Unit Trusts managing director George McKay said unit trusts investing in Hong Kong had been higher than in September. Mr McKay said there had been sustained interest in its Greater China fund, which covers Taiwan, Hong Kong and the mainland, with the bulk of sales through its banking network and investment centres. Other fund management groups said there were about $7 in redemptions for every $5 in sales. One manager said: 'There has not been a big show of interest in retail funds investing in Hong Kong stocks. This smacks of a reallocation at a professional level.' According to the association, total sales of unit trusts investing in Hong Kong reached $85.44 million with redemptions of $29.38 million. Other sectors posted big redemptions with European equity down about $62 million, Japanese equity down $36 million and Asia-Pacific regional funds, including Japan, posting redemptions of $12 million. Cash funds, traditional half-way houses between equity and fixed interest during turbulent markets, had net sales of $28 million. Bond funds also sold $6.5 million more than was redeemed. Association chairman Peter Lord said net outflows for the industry were $82 million with gross sales shrinking to $363 million. Mr Lord said: 'Almost no stock markets around the world went unscathed during the financial crisis in October. Against this background, fund sales activities in Hong Kong suffered. 'Among the global stock markets, the Hong Kong market was one of the markets that suffered the heaviest fall in October. 'But Hong Kong equity funds continued the trend of the past few months and were able to attract a steady inflow of new money. 'One factor may be investors, who missed out on the rally in the stock market earlier this year, seeking value in Hong Kong stocks at their reduced levels and regarding the sharp drop as opportunity to buy.' Mr Lord attributed the modest level of redemptions in Hong Kong units to investors who had bought into the market during the recent rally deciding to 'weather the storm' rather than redeem at a heavy loss.