Sun Life First State Hong Kong Equity Fund: New Money Flooding In — Managers Say They Can Cope

This article is a rewrite of a report from November 2012.

In November 2012’s “semi-portability” era, many workers wanted to move accrued contributions to Sun Life — its First State Hong Kong equity fund topped the charts over 1, 3 and 10 years, returning 149.92% from inception to end-September 2012, about 15% annualised, the best in Hong Kong equities. Some worried: would floods of new money drag performance? Sun Life said: we can cope.

How strong was the fund?

149.92% from inception to September 2012, about 15% annualised. Run by star manager Lau Kwok-kit’s team, it ranked at the top over one, three and ten years — the Hong Kong-equity benchmark of its day.

Will new inflows hurt management?

Sun Life said no. Senior vice-president Luk Kwai-sim said the managers were deeply experienced — even large net inflows wouldn’t affect fund management or operations. The fund’s net assets stood at HK$4.6 billion, and Sun Life had hired 10% more staff before “semi-portability” to handle transfer paperwork. Prepared, not surprised.

What is the lesson from 2012?

Before chasing stars, ask whether it’s worth it. Workers chased the First State fund in 2012 on a genuine long-term record; but past performance isn’t the future, and switching still costs a six-to-eight-week vacuum. Star funds deserve research, not blind pursuit — November 2012’s frenzy remains a mirror today.