Hong Kong caught in the balance
Investors used to spurn the ultra-conservative multi-asset fund but it is now the preferred way to get out of bonds and back into equities
Last year was all about bonds. Hong Kong investors overwhelmingly put their cash into debt funds, particularly those focused on high yield.
Now 2013 is shaping up to be the year of the balanced fund, also known as multi-asset.
The funds invest in everything: bonds, equities and commodities, property and the like. But the focus is on bonds and dividend stocks. They are, in other words, income funds, sitting somewhere in the risk spectrum between high-grade bond funds and dividend-focused equity funds.
Alex Boggis, the managing director of Aberdeen Asset Management's Hong Kong office, says the move to balanced funds reflects investors' desire for income. Previously, people bought a lot of bonds. Now, they buy something a little more diversified, adding a little bit more risk.
"Whenever you go to a bank, you can see what they are selling is multi-income balanced funds. It's all about income. Are they [investors] saying, 'I want a balanced fund?' No, they are saying, 'I want income,'" Boggis says. "Over the past couple of years, money has gone into income assets, such as bonds, and now people are switching to balanced funds.
