The fund industry reached a new record high since 2007, hitting $51.4 billion in gross sales for the first eleven months of 2012, from the last highest recorded sum of $45.5 billion. 

According to the Hong Kong Investment Funds Association, monthly gross sales were around $3 billion to $4 billion in the first six months of 2012 and then went up to $5 billion to $6 billion between July and November. By October, gross and net sales increased to $6 billion and $2 billion, respectively -- the highest monthly level recorded.

The strong inflows were attributed mostly to bond funds. In the eleven-month period, gross sales from bond funds reached $34.8 billion, while in terms of net sales bond funds brought in $13 billion. 

High-yield bond funds led the rise by attracting $4.3 billion net inflows, followed by global bond funds, which pulled in $3.3 billion. The only category that saw outflows was the European bond funds segment, out $53 million, as investors continued to be concerned over the European debt crisis.

The situation was the opposite for equity funds, however, which lost momentum since 2007. Of the 16 equity fund categories, 10 suffered outflows, including Asia ex-Japan and Asian single market funds, which dropped $318 million and $298 million respectively. Greater China Equity funds, which used to be the most popular category, also saw outflows of $279 million. Hong Kong equity funds managed to record inflows, bringing in $32 million. 

"Given the extended low interest rate environment in Hong Kong, it is understandable that investors will continue to search for higher yielding products in 2013. But investors are reminded that they should fully understand the risks," said Bruno Lee, chairman of HKIFA's unit trust subcommittee.

The Hong Kong Investment Funds Association has 77 fund management companies as full/overseas and affiliate members. It also has 53 associate members involved in the creation and administration of funds.