Commuters travel past commercial buildings on a tram in the Central district of Hong Kong on June 21, 2021. (ANTHONY WALLACE / AFP)
HONG KONG – Two hundred to 300 Hong Kong-domiciled fund products could be sold to mainland investors once the Wealth Management Connect is launched, the Hong Kong Investment Funds Association said on Tuesday.
The WMC’s total investor quota is set at 300 billion yuan with individual quotas of 1 million yuan
The WMC scheme will allow residents of nine cities in Guangdong province, Hong Kong and Macao to purchase low-risk investment products sold at banks reciprocally within the city-cluster area.
Eligible Hong Kong fund products with mid-to-low risk are to be sold to mainland customers after the launch, which is expected soon, and more fund products of different risk levels will be launched afterward, according to the HKIFA.
A survey by the HKIFA revealed that 95 percent of the interviewed 1,036 mainland residents (with a monthly household income of over 20,000 yuan, or US$3,100, or with over 500,000 yuan in liquid assets) in the Greater Bay Area expressed an interest in purchasing investment products through the WMC scheme. New energy, biotechnology, and the internet were the top investment products.
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Respondents expect an average 13 percent annual investment return rate as well as an average 8 percent maximum affordable investment loss rate, according to the survey.
As the number of residents in the Greater Bay Area is 10 times that of Hong Kong, the WMC scheme might exert a huge impact in the development of the finance industry in the Greater Bay Area, HKIFA Chairman Nelson Chow said.
The WMC’s total investor quota is set at 300 billion yuan with individual quotas of 1 million yuan.
The WMC pilot scheme was promulgated on June 29, 2020, by the People’s Bank of China, the Hong Kong Monetary Authority, and the Monetary Authority of Macao.