Sales slowdown for MRF northbound funds

Added 27th May 2016

Net cross-border sales of the four Hong Kong funds available to mainland investors saw growth slow in April, but it was still 24 times higher than the southbound flow.

Sales slowdown for MRF northbound funds

In April, mainland investors poured RMB 644.2m ($98.2m) into four Hong Kong-domiciled funds selling via the Mutual Recognition of Funds scheme, according to the latest data from State Administration of Foreign Exchange.

In March, the figure was RMB 522.3m and in February, RMB 157.6m.

In January, northbound funds started selling through the MRF. Since then, cumulative net sales have reached RMB 1.36bn.

On the southbound side, in which 16 mainland funds are currently available for Hong Kong investors, net sales reached RMB 10.2m only in April. The figure slightly improved from March sales of RMB 7.44m.

Cumulative net sales of mainland funds in Hong Kong since late December are RMB 10.2m.

At least five more funds are expected to distribute in Hong Kong in the coming weeks, including two from Principal Financial Group and CCB’s joint venture, and three from Shenzhen-based Bosera Asset Management. Each will launch a bond fund, which is a new asset class for MRF products. Current MRF funds is Hong Kong are only equity or mixed funds.

Morningstar China expected continuing demand for northbound MRF funds because mainland investors increasingly want to allocate away from A-shares. 

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