Amid recent consecutive adjustments in the Hong Kong stock market, the public fund issuance sector has witnessed a surge of new funds shortening subscription periods to seize opportunities during the downturn. Multiple Hong Kong-themed funds originally slated for late December or even cross-year launches have announced early closures of their fundraising periods, with some achieving high portfolio allocations shortly after establishment.
The "lightning-fast fundraising closure" and "rapid portfolio building" strategies reflect new funds' eagerness to capitalize on the Hong Kong market's correction. Industry professionals argue that, considering fundamentals, valuations, and liquidity, Hong Kong stocks currently present high allocation value, with the ongoing market dip offering an ideal entry window.
Unlike previous fund launches that often took one to two months to complete fundraising, recent Hong Kong-themed funds have significantly accelerated their issuance timelines. For instance, Fullgoal Fund announced an early closure of its Fullgoal Hong Kong Stock Selection Mixed Fund, moving the deadline from December 19 to December 10. Despite the tight window, the fund raised a robust RMB 1.83 billion, indicating strong investor interest.
Similar cases abound: Penghua Fund advanced the deadline for its Hong Kong Stock Connect Selection Mixed Fund from January 2026 to December 13, 2025, while Neuberger Berman shortened its Hong Kong Stock Connect Technology Equity Fund’s fundraising period by three months, moving the deadline from March 2026 to late December 2025.
Even fund-of-funds (FOFs) targeting Hong Kong equities have adopted shorter subscription periods. Ping An Fund recently adjusted its Ping An Ying'an Holding Period Mixed FOF’s deadline from December 19 to December 16. According to its prospectus, the FOF can allocate up to 20% of its assets to QDII funds and Hong Kong mutual recognition funds, with Hong Kong Stock Connect stocks accounting for up to 50% of its equity holdings.
Beyond early fundraising closures, many new funds have rapidly built positions. E Fund announced that its E Fund Hang Seng Hong Kong Stock Connect ETF, set to list on December 15, had already accumulated a 69.53% portfolio allocation by December 8, heavily weighted in stocks like Alibaba, Tencent, Xiaomi, and Meituan. This contrasts sharply with the cautious, low pre-listing allocations seen in ETFs launched in October and November.
Industry insiders attribute this aggressive positioning to the recent sharp corrections in Hong Kong stocks, where heavy holdings of institutional funds saw significant weekly declines despite solid fundamentals. Some funds, however, have adjusted strategies mid-campaign due to shifting market conditions. For example, Xinyuan Fund initially extended its Xinyuan Hong Kong Stock Connect Leader Fund’s deadline to February 4, 2026, but later advanced it to November 28 after a late-November market dip, with the fund beginning substantial allocations by mid-December.
Public fund managers remain bullish on Hong Kong’s market prospects. Li Yaozhu, Head of International Business at GF Fund, expressed optimism for 2026, citing improved market breadth. He highlighted Hong Kong’s role as a gateway for foreign investment in Chinese core assets, particularly benefiting from the Fed’s rate-cut cycle. Sectors like internet platforms, AI-driven tech, and innovative pharmaceuticals offer high scarcity value, with the Hang Seng Tech Index’s TTM P/E ratio at 23x—below Nasdaq and ChiNext levels.
Great Wall Fund identified three key opportunities: 1) tech growth (internet, media, and manufacturing exports), 2) financial reforms (brokerages and insurers), and 3) cyclical sectors (metals and chemicals) with low valuations. Cheng Ting, manager of Yinhua Hong Kong Stock Selection Equity Fund, emphasized AI as a global innovation driver, spotlighting hardware opportunities and domestic internet firms’ rising AI-related revenue contributions.
The rush of new funds underscores confidence in Hong Kong’s rebound potential, with managers positioning aggressively ahead of anticipated recovery.
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