The Association said the robust sales for the fund industry, which included net sales of $5,103m (HK$39,793m, €3,541m) over the six month period, reflected investors’ desire to put their money to work in the “extreme low interest rate environment and the threat of inflation”.
During the period, monthly gross inflows were between $2.5bn and $3.9bn, with all months registering positive fund flows. However, the HKIFA said net sales dropped gradually after a strong start in January and only started to pick up again in May. Despite this, gross and net sales in the second quarter were still higher than in the first, with sales reaching $11,221m and $3,075m respectively, up by 14% and 51% over the first quarter.
In spite of the record sales during the first half of the year, Desmond Ng, chairman of the HKIFA, was cautious about his outlook for sales in the second half of this year.
“The markets have been plagued by a lot of uncertainties: the Eurozone sovereign crisis, the worsening US fiscal position, the anaemic global economic growth; as well as the inflationary pressure in the emerging markets all have dampened investment sentiment.
“The downgrade in the US credit rating has further exacerbated the situation and global markets have experienced extreme volatilities of late.”
The HKIFA, which represents 62 fund management companies, also revealed that, while equity fund flows outpaced those of bond fund sales in the first quarter, the tide turned in the second. In the first six months of 2011 as a whole, equity funds accounted for 49.5% and bond funds represented 39.9% of the industry gross total. However, in terms of net sales, bonds fared better, notching up sales of $2,781m versus equity fund net sales of $2,055m.