The Hong Kong Investment Funds Association said the US election and other market uncertainties caused investors to shift funds to more stable fixed income options.

Hong Kong's fund industry saw net sales grow 36 per cent year-on-year to $3.6 billion while gross fund sales deflated 18 per cent year-on-year to $50.4 billion, according to the Hong Kong Investment Funds Association.

Bond funds fared strongly throughout the first three quarters of 2016 as gross sales soared 174 per cent year-on-year to $27.1 billion, accounting for around 54 per cent of total industry sales. Additionally, a notable improvement was also made on net sales as outflows in 2015 turned to net inflows of around $11.4 billion, the HKIFA said.

Equity funds year-to-date did not perform so well, however, as gross sales plummeted 66 per cent to $13.1 billion. While net outflows totalled $7.1 billion in 2015, this year there were net outflows of $7.5 billion.

Balanced funds continued to see net outflows, although the level narrowed to $471 million from $1.5 billion last year.

“While gross sales have declined, we continue to see investors actively managing their investments and shifting funds to more stable fixed income options in light of the US elections and other market uncertainties,” said Arthur Bacci, chairman of the HKIFA. “With the election resolved and predictions of increasing interest rates, we would expect investors to show increasing interest in equity funds.”