Hong Kong’s locally domiciled public funds, including exchange-traded funds, saw net inflows jump 88% in 2024, driving their total assets up 22% year-on-year to HK$1.64 trillion (US$210.2 billion), as investor sentiment improved.

The funds attracted HK$162.9 billion of inflows, up from HK$86.64 billion in 2023, the Securities and Futures Commission (SFC) says in a report on March 6.

Net inflows into ETFs alone were HK$22.8 billion, or around 14% of the total. Average daily turnover of ETFs on the Hong Kong bourse rose 35% year-on-year to HK$18.9 billion, accounting for 14% of total stock market turnover. The number of listed ETFs was up 11% to 194.

The SFC says new guidelines announced last year to relax restrictions on cross-border fund sales through the Mainland-Hong Kong Mutual Recognition of Funds scheme “strongly bolstered Hong Kong fund sales”. The guidelines became effective on January 1 this year.

“A strong asset management sector and enhanced market connectivity amidst improving investor sentiment provided Hong Kong’s capital markets with a strong finish to 2024,” the report says.

According to Julia Leung, the SFC’s chief executive officer, Hong Kong markets “demonstrated time-tested resilience and enduring appeal to global investors through a challenging year” amid Beijing’s “comprehensive support” for the Chinese economy.

“Building upon the progress, the SFC will remain committed to facilitating developments and fostering innovation for our markets while upholding their integrity and quality,” she says in the report.