The trouble with guaranteed funds

Fund houses offering guaranteed products create a conflict between revenue and investor education.

In the wake of market instability, the rage among fund management houses in Hong Kong has been to roll out guaranteed funds. May was a banner month for unit trusts. Total intake from Hong Kong investors totalled $1.3 billion, and guaranteed funds attracted $957 million of that, or about 71%, according to the Hong Kong Investment Funds Association HKIFA.

Not only is this the highest amount guaranteed funds had ever received in any one month, it is the...

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