THE drain of retail money from unit trusts sold in Hong Kong slowed dramatically in the past two months, figures released yesterday show. Investors redeemed a net total of US$10.3 million (HK$79.5 million) in June, a Hong Kong Investment Funds Association's (HKIFA) survey says. The figure is sharply down from the $123.89 million withdrawn in March and $68.13 million in April. In May there was net investment of $16.75 million. But the survey underlines the stark turnaround in equity markets in the first six months of this year. ''What we are seeing now is that investors have taken profits in Southeast Asia and we can expect to see a shift in emphasis,'' said Regent Financial Services manager, Astrid Stapleton. Total net sales for the first half of 1994 stand at $44.37 million - less than one-sixteenth of the amount pumped into Hong Kong's unit trust industry in the last six months of last year. Net sales for the first half of 1994 are also down 85.2 per cent on the same period last year. Richard Haw, HKIFA chairman, defended the figures. ''Firstly, the level of net outflow has tapered off from over $120 million in March to $10 million in June,'' Mr Haw said. ''Secondly, while gross sales fall short of the level in 1993, they are still robust, especially in view of the less favourable market conditions in 1994.'' Gross sales, or the amount of money entering the industry, were 4.42 per cent lower in the first half of 1994 than the last six months of 1993. Mr Haw attributed the waning retail interest in unit trusts to investors' moves to take profits after a year of spectacular growth in both the bond and the stock markets. ''This trend has been reinforced by the concerns over US interest rates rises, which have led to further consolidation in the market,'' he said. There was a steady growth trend when compared to previous years' figures, he said. Net sales for the first quarter were $106.05 million, but in the second quarter redemptions exceeded sales to give a net cash outflow of $61.68 million. March was the first month for almost two years that investors took more money out of unit trusts than they put in. Overall activity in the funds industry dropped marginally in June. Gross sales were $218.85 million, compared with $286.31 million in May. Redemptions in June were $229.15, against $269.56 million in the previous month. Mr Haw was cautious about the coming six months, and said they would not be without trouble. ''Because the interest rates factor will continue to plague the market, although to a lesser degree, we believe that industry sales will not be smooth sailing,'' he said. After dominating the market in gross and net sales in 1993, Asia-Pacific sectors lost their shine, and investors switched to more diversified portfolios. Dr Andrew Freris, chief regional economist for Salomon Brothers, said it came as no surprise that there was a large inflow of money in late 1993 and that it dropped off substantially in the first six months of this year. ''In 1993 we were still in a bull market,'' he said. Further declines in the valuations of Hong Kong's market were likely in the next six months. ''We expect the Fed to raise interest rates by 50 basis points on August 16, and this will definitely translate into a 50-basis-point rise in Hong Kong's interbank interest rates,'' he said. ''It is also likely that there will be a rise in Hong Kong's prime interest rate.'' Mo Yik-ko, an economist with UBS Securities, said the fund redemptions rose because the bond market collapsed and interest-rate increases triggered an equity market crisis. But he said as investors felt interest rates were at their highest, they would return to the stock market. He said the fund redemptions would drop when the bond market stabilised.