Asian investors fearing an extended bear market are moving their money out of riskier investments and into conservative safe havens. The mutual fund industry is responding to this shift by offering jittery investors alternative, more conservative products.

"There is now a trend to less-risky products, so we are developing some products that serve these needs," Rudolf Apenbrink, the Asia Pacific chief executive of HSBC Investments, told Reuters in an interview. “That may be in the fixed-income area, that may be in the balanced areas, or absolute-return products.”

Equity funds in Hong Kong reported an average loss of 3.85% March, with China-focused funds down almost 13%, according to fund tracker Lipper. Bond funds, which investors often seek out as safe havens in troubled markets, saw a 1% rise.

Fund experts say many investors may be sitting comfortably on large gains, while others may be at a loss and could be waiting for the fund to return to its original value before selling.

"Now may be the calm before the storm. Chinese investors, especially at the retail level, have shown a tendency in the past to sell out once investments return to par value. Should markets rise, a flood of sales may yet await," Shanghai-based fund consultancy Z-Ben Advisors said in a research report.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.