Hong Kong’s mutual fund sales down 18pc in first nine months amid volatile market

Mutual fund sales in Hong Kong fell 18 per cent in the first nine months this year, led by a decline in the sale of equity funds that were down 66 per cent during the period as investors were cautious amid volatile markets, according to the Hong Kong Investment Funds Association (HKIFA).

HKIFA, representing the local fund industry, said on Wednesday total mutual fund sales stood at US$50.4 billion for the first nine months, down 18 per cent year on year.

Leading the decline were equity funds which reported a 66 per cent drop in sales to US$13.1 billion.

There was also more redemption pressure on equity funds, which saw total outflows of US$7.5 billion in the period. Funds redeemed for cash stood at US$20.6 billion but this was offset by new equity purchases of US$13.1 billion, resulting in a net outflow of funds of US$7.5 billion this year.

This compared with a net inflow of equity funds of US$7.1 billion last year.

CitiTrust chairman Stewart Aldcroft said the fall in equity fund sales was mainly due to the volatile stock markets this year.

“The Shanghai stock market fell 10 per cent in January due to worries over the economic slowdown on the mainland. In June, we had the Brexit vote in Britain and then in November, we had Donald Trump elected as US president,” Aldcroft said. “All of these events surprised the markets and led to stock markets worldwide becoming very volatile. This has discouraged investors to buy in any stock related funds.