Unit trusts regain attraction

INVESTOR interest in Asia-Pacific funds in August turned the tide of the retail fund exodus seen in the turbulent first half.

Hong Kong Investment Funds Association figures show US$86.31 million more of retail investor money flowed into unit trusts in August than the total that flowed out.

Gross sales in the month totalled $298.82 million, compared with gross redemptions of $212.51 million.

The net sales in August mean that for the year to the end of August the industry had comfortable net sales of $130.03 million.

Gross sales in the period to the end of August were $2.89 billion, while gross redemptions stood at $2.76 billion.

Compared with the corresponding period of last year, activity this year is well ahead.


In the first eight months of last year, a record-breaking year for the industry, gross sales were $1.8 billion and gross redemptions were about $1.44 billion, leaving net sales at about $350 million.

For the whole of last year, gross sales were $3.59 billion and gross redemptions were $2.58 billion, leaving net sales at about $1 billion.

Association chairman Roger Pyrke said: 'Despite the US interest rates rise in August, investment sentiment has in general been positive as worries of further short-term rises had been allayed.' He said investor confidence was growing in the region as the slumps recorded in the first half of the year were corrected and many of the markets climbed towards new highs.

'This has led to a strong inflow, leaving August to register the second highest net sales of the year,' said Mr Pyrke.


Asia-Pacific funds totally dominated activity, making up 55 per cent of all gross sales and redemptions combined and representing $103.8 million of net sales.

By comparison, all other sectoral activity was dwarfed. The second most busy sector was in cash funds where gross sales and redemptions accounted for 15 per cent of activity.