An association spokesman said: ''The net investment figure does not only surpass all the quarterly net investment figures since 1989, but it also exceeds the yearly figures recorded in the past four years.'' In 1989 net sales were $22.9 million, while in 1990 a net $255.1 million left the industry. There were net sales of $226.1 million in 1991 and $144.2 million last year.

Association vice-chairman Andrew Lo said: ''The encouraging result of the second quarter clearly demonstrates the growing popularity of unit trusts among local investors.'' During the second quarter a significant amount of retail activity focused on the launch by Jardine Fleming of a Pacific smaller companies trust.

The launch took in $122 million, 44.5 per cent of sales in June and 14.9 per cent of sales in the second quarter.

There were net inflows in June in all the association's fund sectors except Hong Kong equity funds, where a net outflow of $7.9 million was recorded.

Total sales in that sector, which accounted for eight per cent of total activity, were $15.1 million, while there were redemptions of $23 million.

The largest net inflow, $30 million, went into money market funds, which accounted for 31.5 per cent of all activity. There were $89.8 million of sales and $59.4 million of redemptions in the sector.

Such a high level of activity in money market funds is in line with previous monthly activity reports from the association during the past 18 months.

However, it is surprising given the interest being shown by retail investors in equity markets that is being reported by major fund groups in the territory.

The Asia-Pacific equity sector had the second biggest net inflow of $25 million. Total sales were $79.7 million, while redemptions were $54.6 million. This represented 28.37 per cent of total activity.

Bond funds saw net inflows of $9 million. There were sales of $13.6 million and redemptions of $4.5 million. Money market funds, fixed interest and cash investment together totalled 35 per cent of all activity.

International and managed portfolio funds took in $11.5 million, with $18.2 million coming in sales and $6.7 million being redeemed.

A key area of activity, but one that saw a low level of net inflow, was the Japanese equity fund sector.

The net sales figure in June was $2.3 million. Sales reached $39.2 million and redemptions amounted to $36.9 million, representing 16 per cent of total activity.

Total sales in the first half of the year were $1.3 billion, more than the total in 1989 and 1990 together.

Total redemptions in the first half were worth $1.03 billion, more than the total for the whole of 1989.

In the first quarter of the year, total sales were $514.4 million, while redemptions were $448.7 million. Net sales amounted to $65.7 million.

Since records were kept by Wyatt in 1989, the largest single monthly inflow of investor money, $135 million, was seen in April.

The Investment Fund Association was formerly known as the Hong Kong Unit Trust Association and is made up of 38 fund management groups.

The sales and redemption activity data is taken from figures supplied by 24 of the member fund groups and between 500 and 570 funds. The fund base for June was 504, the lowest since June 1992.