Long-term fund flows in Asia slowed down significantly to US$4.5 billion during December 2016, as net inflows to China (US$14 billion) were partially offset by net redemptions mainly out of Japan, India and Korea. Mixed funds led the contributions at roughly US$3.7 billion, followed by bond products with US$2.4 billion.
Meanwhile, equity funds and ‘other’ products, which includes largely guaranteed and real estate funds, experienced net redemptions of US$1 billion and US$0.6 billion during the month, respectively. During full-year 2016, Asia attracted the most net long-term fund flows among all regions, totaling US$253 billion in net subscriptions.
Bond Asia Pacific was the top selling investment category in December, raising US$4.3 billion in net flows, primarily from Bond CNY products in China. Mixed Flexible funds also attracted US$3.9 billion in net new money. By comparison, Equity Asia Pacific funds suffered net outflows of US$1.4 billion during the month.
At the product level, two newly launched bond funds in China, BOC Fengrun Quarterly Interval Bond Fund and ICBCCS FengYi 1 Year Regular Open Bond Fund, topped the bestseller list during the last month of 2016, accumulating US$2.9 billion and US$2.5 billion in net flows, respectively. Continuing the trend from previous months, both funds gathered the majority of the money from institutional investors, largely from their respective parent companies Bank of China and Industrial and Commercial Bank of China. These bond funds are usually structured as “new” or “innovative” closed-end funds and interval closed-end funds in China, often have a shorter IPO period and a small number of investors (mostly institutional investors).