Chinese funds cut Hong Kong stock holdings to 2-year low despite strong southbound flow

Chinese mutual funds shifted focus amid market volatility, cutting their share of Hong Kong stocks to 23.3 per cent in the second quarter Chinese mutual funds have reduced their Hong Kong stock holdings via the southbound Stock Connect to a more than two-year low in the second quarter, despite a lot of money moving southward over the same period. The share of Hong Kong stocks in their portfolios fell to 23.3 per cent in the second quarter of this year, which was lower than the 23.9 per cent posted two years earlier, according to a report published by investment bank China International Capital Corporation on Thursday. It also marked a sharp fall from 34.7 per cent in the first quarter. The investment bank revealed its findings by tracking 5,163 mainland mutual funds, which collectively managed 4.4 trillion yuan (US$649.98 billion) in assets. It did not include investments by Qualified Domestic Institutional Investor (QDII) funds. Mainland mutual funds held Hong Kong-listed shares worth 649.1 billion yuan by the end of June, down about 23 per cent from three months earlier.

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