Hong Kong domiciled funds drew HK$33.5 billion (US$4.3 billion) of net inflows in the fourth quarter of 2023, a 179% surge from the preceding three-month period from new listings and an influx through the Stock Connect channel with China.
Inflows for the full year jumped 93% from 2022 to HK$87.1 billion and helped lift assets under management of the 914 funds up 4.9% to HK$1.35 trillion, the Securities and Futures Commission (SFC) says in a report on March 9.
The regulator highlighted several factors for the increase, including the listing of the world’s largest Saudi Arabia-focused exchange-traded fund in November by Hong Kong asset manager CSOP Asset Management, and growing investor interest in the Stock Connect.
“[The] Mainland-Hong Kong Stock Connect kept up its momentum,” the regulator says, with average daily northbound trades growing 8% year-on-year to 108.3 billion RMB ($15.05 billion) in 2023 and average southbound trades holding steady at HK$31.1 billion.
Northbound trading refers to the channel for investors in Hong Kong to trade China stocks. Investors in the Mainland trade Hong Kong stocks via the southbound link.
Meanwhile, the SFC says it is working closely with the Hong Kong exchange on implementing the integrated fund platform (IFP) that was announced by the government in November.
The platform will serve as a retail fund distribution channel for locally domiciled retail funds. The timeframe for the launch has not been finalised.
“The platform will provide a business-to-business service model initially and cover the front-to-back distribution lifecycle and value chain for distributing SFC-authorised funds in Hong Kong,” the regulator says. “The IFP is expected to generate new business opportunities in the Hong Kong retail fund market.”
