Spooked by volatility in the world's stock markets in April, potential unit-trust investors held on to their cash in May, causing flows to slow to a trickle. Locally authorised unit trusts, or mutual funds, attracted a net US$60.3 million in May, less than half April's net inflows of US$154.2 million, the Hong Kong Investment Funds Association (HKIFA) reported. However, fund industry veterans greeted the figures with some relief, having weathered much worse in the past. 'We're quite encouraged, in fact, that we're not seeing outflows from mutual funds,' said Mark Konyn, a director at Dresdner RCM Global Investors. 'So investors have steadied their nerve . . . We aren't seeing any cash calls at the moment. People are fairly comfortable with what they've got.' For example, in November a net US$77.8 million flowed out of unit trusts as people redeemed traditional mutual-fund investments to put money into the Government-sponsored Tracker Fund of Hong Kong (TraHK). During the regional financial crisis, mutual funds haemorrhaged for months on end. Even now, individual fund sectors are seeing net outflows. Investors pulled money out of North American and Japanese equity funds in May, with North American funds losing a net US$11.1 million and Japanese funds a net US$16.1 million. HKIFA executive director Sally Wong Chi-ming said the bearish attitude towards North American funds came down to expectations of further interest-rate rises in the United States. Mr Konyn attributed the bearish attitude towards Japanese funds to concerns about the country's slowing economic growth and fears the Bank of Japan might move away from its zero interest-rate policy, which had helped the economy pick up some steam after a decade-long recession. European equity funds continued to attract new money, gaining a net US$36 million in May. But this was well off the pace in April, when a net US$76.3 million was added. May's other big winner was a composite sector called 'international/other [equity/managed] funds', which pulled in a net US$44.7 million. Hong Kong equity funds reversed a four-month negative trend, showing a positive net inflow of US$7.7 million in May. Single-Asian country funds (other than Hong Kong funds and Japan funds) lost a net US$6.8 million. Asia-Pacific funds excluding Japan lost a net US$2.9 million. Bond funds had net outflows of US$8.6 million. Cash funds, also known as money-market funds, had net outflows of US$2.9 million.