THE Hong Kong Investment Funds Association, after the stellar performances last year of Southeast Asia's stock markets sparked interest in mutual funds, says it expects the sector to continue growing this year.
But chairman Richard Haw conceded yesterday that the interest was bound to be tempered by sharp corrections experienced in nearly every stock market across the region this year.
''We don't think it will get too bad this year in terms of where the markets are and, provided that occurs, it will mean another year of progress,'' he said.
Despite the inroads made in the past year, mutual funds have a penetration rate of only two to three per cent in Hong Kong because many investors are more content having direct control over their investments.
With the markets tumbling more than 20 per cent since hitting record highs in early January, the issue of initial charges will probably attract more attention as investors begin to scrutinise their opportunity costs.
According to a biannual directory issued by the HKIFA yesterday, more than 85 per cent of fund houses charge an initial fee of five to six per cent for equity funds while 70 per cent charge three to five per cent for bond funds.