Few investors are willing to invest in hedge funds as they are not familiar with the new products, a Hong Kong Investment Funds Association (IFA) survey has found.
Just 2 per cent of non-fund investors and 21 per cent of existing fund investors said they would buy hedge funds, while 63 per cent of non-fund investors and 50 per cent of fund investors said they would not buy hedge funds.
The IFA commissioned NFO WorldGroup to interview 1,000 fund investors and 500 non-fund investors.
The findings may disappoint fund houses, many of which have been planning to introduce hedge funds in the third or fourth quarter after the Securities and Futures Commission relaxes restrictions.
Hedge funds employ a variety of trading strategies unavailable to conventional funds - including using derivatives and short-selling - which can enable them to do well in falling markets.
Of those surveyed who said they did not plan to invest in the hedge funds, 51 per cent of non-fund investors and 42 per cent of fund investors gave unfamiliarity as a major reason.