Asian investment funds based in Hong Kong recorded net outflows for the second successive month in July as the region was buffeted by more financial turbulence. However, the outlook for the region appeared to be regaining some stability, with net outflows of US$32.27 million, substantially less than in June, when they reached a peak for the year of $141.35 million. Other figures released by the Hong Kong Investment Funds Association showed July posted a net inflow of $3.5 million, if investment and redemptions of all funds were taken into account, a substantial turnaround from June when there were net outflows of $133.9 million. In July, only five of the association's 14 fund sectors recorded net inflows, none of them Asian. 'As the outlook for the region continues to be bleak, investors continue to stay away from Asian equity funds,' the acting chairman of the association, Lin Yoke Seetoh, said. But, she added, the lower outflows from Asian funds came because of a fall in fund redemptions. Hong Kong equity funds accounted for $2.77 million, or 8 per cent, of the net outflows from Asian funds. Hong Kong funds have registered net outflows in five out of the first seven months of the year, with aggregate net outflows amounting to $27.34 million. But most other Asian fund sectors performed worse, with single Asian country funds, excluding Hong Kong and Japan, taking last place, with net outflows of $11.91 million. The figures reflected an overall movement by investors back towards more developed stock and bond markets, the association said. European funds were again the association's strongest performers by far, with net inflows of $48.72 million, thanks to slow but sure economic growth and generally low interest rates on the continent. July was the European funds' best month this year and the fifth month in a row that they have registered net inflows, bringing inflows for the year to $190.15 million. However, the association said Russia's crisis might influence investor decisions towards Europe in forthcoming months.