More investment to flow into equity, bond and mixed assets funds amid rate cut hopes: HKIFA

More investor money is expected to shift into equity, bond and mixed-asset products next year, the Hong Kong Investment Funds Association said, as rate-cut expectations lift risk appetite and sizeable bank deposits move out of maturing high-interest time deposits.

Also, positive market sentiments towards artificial intelligence are expected to attract more investors to allocate assets in the Asian market, HKIFA said.

Sales of funds maintained momentum in November, as well as global equity and bond funds, boosted by investor optimism over the upcoming interest rate cut that drove the risk appetite, said Simon Wong Tak-tai, co-chair of the Unit Trust Subcommittee.

For the first three quarters, Hong Kong retail funds saw its gross sales grow 35 percent year-on-year to US$82.6 billion (HK$642.3 billion), surpassing the total of 2024, according to HKIFA.

Net inflows reached the 10-year peak of US$15.7 billion, rising 44 percent, also higher than the US$12.3 billion for the full year of 2024.

Gross sales of equity funds increased 21 percent to US$16.8 billion during the first three quarters, with the net outflow at US$40 million.

Despite the strong performance in Hong Kong's stock market this year, the equity funds for the first three quarters still recorded new outflow, dragged down by the increasing risk-off sentiment in the second quarter, said Nelson Chow Kin-hung, co-chair of the Unit Trust Subcommittee.

Bonds' sales climb 24 percent to US$32.5 billion, drawing a net inflow of US$15.7 billion, while sales of mixed assets jumped 30 percent to US$17.2 billion, with a net inflow of US$1.7 billion.

Money market funds attracted US$2.94 billion of net inflow, with a 1.2 times growth in gross sales. However, it saw net outflow for the first time since August amid rate cut expectations after consecutive monthly net inflows since the beginning the 2024.