HONG KONG Chinese investors on average spend almost a third of their income on investment schemes, with nearly one in three devoting half their earnings to savings plans. Of their total investments, a little under half (45 per cent) is ploughed into unit trusts, according to the first survey of Chinese unit trust investors carried out by the Hong Kong Investment Funds Association in conjunction with the Chinese University of Hong Kong. The survey of 120 investors produced the first profile of a Chinese unit trust investor. Using extensive interviews with investors, the survey was split into two parts to establish the buying habits, level of market penetration, and investment decisions of investors. The second phase, which focuses on investors who do not use unit trusts in the savings strategy, is expected to be published towards the end of the year. Chinese investors are generally less aware of unit trusts than expatriate investors, although the popularity of trusts is growing. The survey found that the average amount spent on each unit trust purchase was HK$41,680, although it did not provide figures on the overall amount invested in unit trusts. The chairman of the HKIFA's China affairs committee, Andrew Lo, said the length of time that investors were prepared to invest in unit trusts and the size of their investments compared with other personal investments was encouraging for the industry. ''This is the first in-depth survey carried out by the industry among current Chinese unit trust investors,'' Mr Lo said. ''The major objective is to understand and to better serve the needs of local investors.'' In a departure from earlier profiles of Hong Kong investors which showed high levels of switching, the survey revealed that once the investors had committed money to a unit trust, they were willing to treat it as a medium-to long-term investment. Over 50 per cent said they would hold the original funds they had invested in for more than one year and 20 per cent claimed they would hold funds for seven to 12 months. A total of 1,200 investors were canvassed to take part in the survey but a response rate of just 10 per cent was achieved. Most taking part in the survey were contacted through fund houses. All of the 120 investors who responded to the survey took part in a 30-minute interview which was conducted by researchers from the Chinese University of Hong Kong. The survey showed the typical unit trust investor was likely to be relatively well-off. Nearly 80 per cent of respondents were either professionals or administrators. More than 70 per cent of the participating investors were university-educated and lived in self-owned properties. More than 80 per cent were between 26 and 45 years old. Transaction costs for unit trusts did not compare favourably with other investments. Respondents said transaction costs for blue-chip stocks, foreign exchange and life insurance were cheaper than those for unit trusts. They also judged property and blue-chip stocks to be less risky than unit trusts. For rate of returns, the investors reported average satisfaction with the performance of their unit trusts but said property and shares gave higher rates of return. More than half of the respondents invested directly through fund management companies, while a quarter used a combination of fund houses and intermediaries such as financial advisers or banks to handle their investments. Only 20 per cent relied solely on intermediaries to set up their unit trust investments. Convenience received only a fair rating, with most investors saying it was easier to invest in shares or foreign exchange. When selecting which company to put money into, investors looked at the company's qualitative and performance aspects. More than 50 per cent said they considered issues such as size, reputation and background, while 30 per cent looked at performance. Another key finding to emerge from the survey was that most investors did not believe that a large sum of money was needed to invest in funds. Defending the claims that transactions in unit trusts cost more than in other investments, Mr Lo said the costs did not appear to have stopped people from investing. He said the possibility that lower transaction costs would make the industry more popular would not be considered until the results from the second part of the survey were available. FACT FILE Total number of SFC-authorised unit trusts in Hong Kong at end of March 1994): 836 Total value of funds under management: US$28.217 billion (US$17.218 billion at end of 1993). Total fund management companies registered in Hong Kong: 62 (end of July 1994) Best performing sector over one and two years to end of July 1994: Thai equities (returns of 71.9 per cent over one year, 162.3 per cent over two years). Best performing sector over five years: Asian Pacific Warrants (305 per cent).Section 15 (1) of the the Securities Ordinance gives the Securities and Futures Commission (SFC) the power to authorise unit trusts and mutual funds. The Protection of Investors Ordinance regulates advertisements and offers of investment arrangements to the public.