The Securities and Futures Commission report found that investors invested 44% more funds in Hong Kong stocks, bonds, and other assets, raising the total to HK$3.8 trillion.
Hong Kong strengthened its position as a leading global wealth management hub after investors made significant capital commitments to the city last year, bringing assets under management to HK$35.14 trillion (US$4.5 trillion), just short of an all-time high, before stocks and other assets gave significant gains.
The Securities and Futures Commission released its annual report on Wednesday, stating that assets under management increased by approximately HK$4 trillion in 2024, a 13% rise from the previous year, primarily due to an 81% surge in net fund inflows of HK$705 billion. In 2021, it set a record of HK$35.55 trillion.
The report stated that the private banking and wealth management industry experienced a 15% increase in assets under management to HK$10.4 trillion. The inflows from the asset management and fund advisory sector witnessed 571% growth to HK$321 billion.
Christina Choi, Executive Director of investment products at the Securities and Futures Commission (SFC), stated that Hong Kong is rising in prominence as a leading international centre for asset and wealth management, thanks to strong fund inflows, financial innovation, and a growing talent pool.
The inflows foreshadowed a strong year for investors in Hong Kong’s financial market. The Hang Seng Index is now one of the best-performing stock indexes in the world after increasing 25% so far this year.
The industry data indicate that a stock market re-rating increased demand for initial public offerings (IPOs) and increased risk appetite. It is helping the city to get to the top of the global league table.
A stock market re-rating occurs when investors are willing to pay a higher price for a stock relative to its earnings (P/E ratio).
The SFC states that 237 asset management, banking, and insurance companies took part in the poll. It did not include direct investment from the Hong Kong government or single-family offices.
This year, the growth has been rapid. According to SFC, the net asset value of Hong Kong-based funds increased by 21% to HK$1.99 trillion at the end of May, after a 22% gain in 2024. The city received net new funds inflows of HK$237 billion, which is more than the HK$163 billion reported from last year.
Paul Chan Mo-po, the financial secretary, stated that he feels optimistic about the future of the mainland and Hong Kong markets after speaking with investors from Europe, America, and Southeast Asia. The stability in their financial market and robust growth opportunities have added to their need to diversify amid geopolitical tensions.
SFC interviews investment managers and found that they invested 44% more funds in Hong Kong stocks, bonds, and other assets, raising the total to HK$3.8 trillion.
The poll showed that they increased their investment by 27% in Europe, 22% in the US, and 17% in Japan. Allocations to China’s mainland decreased by 9%.
Cross-border business drove expansion in the asset management industry. At the end of last year, non-Hong Kong investors owned HK$21.85 trillion, or 63%, of the assets. Boston Consulting Group released a report last month stating that Hong Kong and Switzerland are the two largest cross-border wealth hubs in the world.
The SFC survey shows that private banking and private wealth management assets increased by 15% to HK$10.4 trillion last year, indicating that more wealthy customers used Hong Kong to manage their wealth.
Sally Wong, CEO of the Hong Kong Investment Funds Association, stated that the inflows are evidence of the success of policy measures that support Hong Kong as a fund hub. He is confident that with the government’s initiatives, the asset management industry will continue to grow.