MRF northbound sales reach $415m in 1H

Added 25th July 2016

Hong Kong mutual funds selling in the mainland under the Mutual Recognition of Funds scheme reached RMB 2.77bn ($415m) in net sales in the first half, 45 times higher than the opposite flows.

MRF northbound sales reach $415m in 1H

Four out of six approved northbound funds are selling in onshore China.

For the six months since the sales began in January, RMB 3bn of subscription and RMB 239m of redemption were recorded for the northbound funds.

In terms of monthly figures, net sales in June for these four funds were RMB 696m. The figure is down slightly from May’s figure of RMB 707m, marking the first month-on-month drop, according to the latest data from State Administration of Foreign Exchange.

Southbound funds, or mainland funds selling in Hong Kong, continued to face a cold reception despite more launches.

At the moment, 23 of the 40 approved mainland funds are selling in the SAR. Net sales totaled only RMB 60m in the first half, and RMB 4.2m for the month of June.

Three more mainland funds were approved this month by the Hong Kong regulator. One is the Fortune SG Power Portfolio Mixed Fund by Fortune SG Fund Management, a joint-venture between Societe Generale Group and Baosteel Group.

The other two are mixed asset funds from ABC-CA Fund Management, which is jointly owned by Amundi Asset Management, Agricultural Bank of China, and Aluminum Corporation of China.

Despite the greater interest of mainland investors in offshore products, the China Securities Regulatory Commission appears to be delaying the approval of more funds, including BEA Union Investments’ Asian bond fund, which filed the application in July 2015.

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