China's Investment Surge: A Boon for Hong Kong Mutual Funds

Chinese investors are heavily purchasing Hong Kong mutual fund products that invest overseas, particularly in bonds, following expanded cross-border trading opportunities. The Mutual Recognition of Funds (MRF) scheme has become a significant outlet due to higher quotas for mainland investors, amid low domestic bond yields and a struggling stock market.

Chinese investors are flocking to Hong Kong mutual funds, snapping up products that invest overseas, primarily bonds, after new regulations expanded their trading options. The Mutual Recognition of Funds (MRF) scheme has reopened with higher quotas for mainland investors, leading to a surge in demand.

This increased investment interest is driven by China's low domestic bond yields and a struggling stock market, prompting investors to seek better returns overseas. Notably, funds focusing on U.S. Treasuries and other foreign bonds have seen overwhelming popularity, even reaching subscription limits within days.

The attractiveness of the MRF scheme is heightened by its ability to act as an alternative investment route amid limited quotas in China's Qualified Domestic Institutional Investor program. Industry experts see it as a substantial channel for attracting global funds.

(With inputs from agencies.)