HK and China funds dominate MPF performance as volatility reaches 11 year high

6 January 2021

Post GFC volatility impacts member account balances

MPF Ratings’ December MPF Performance Survey has now been uploaded on our website.

Key points are as follows:

  • The top 10 best performing MPF constituent funds in 2020 include 7 HK & China Equity Funds (see Table 1). 
  • The average 1-year return of all MPF funds was a strong 12.31% but 2020 volatility was at a post GFC high.
  • Despite record volatility, all asset classes reported gains for both December and on a 1-year basis (see Table 2).
  • Total MPF assets reach an estimated $1.138 tr, an all time high.
  • Average member account balances are at an estimated all time record of $255,000 per MPF’s 4.46m members.

When releasing MPF Ratings’ December MPF Performance Survey, Francis Chung, MPF Ratings’ Chairman commented, “In 2020 we saw the very highs and very lows of performance, resulting in the highest level of volatility since the Global Financial Crisis, but despite this, MPF managed to produce both a positive performance month in December (3.33%) and a very strong average return of 12.31% for the year, the 7th best annual return in MPF’s 20 year history.”

When asked what key lesson was learned in such a volatile market for MPF members, Mr Chung replied, “The record volatility experienced in 2020 will mean most MPF members who tried to time markets are likely to have missed the strong returns. A very painful and costly lesson which those MPF members will pay for not only in 2021, but in many years to come too. The key to long term investing is “time in market” not “market timing”.”

Table 1: Top 10 best performing MPF constituent funds for the year of 2020

Source: MPF Ratings

Table 2: 1-month and 1-year returns of MPFR Indices as at 31 December 2020

Source: MPF Ratings

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