27 January 2021
MPF account balances forecasted to reach a record high of $267,000
Key points are as follows:
- $11,900 is expected to be added to member accounts in January.
- MPF account balances are forecasted at around $267,000. An all-time record.
- MPF system is expected to generate $53.12bn in earnings in January, lifting MPF to $1.19tr in size. Highest level ever recorded.
- Best performing asset class is forecasted to be Equity Fund (HK and China) with a return of 10.22%. Bond Funds are expected to produce a negative return of -0.46%, the only asset class to record a loss.
MPF Ratings Ltd, an independent Mandatory Provident Fund (MPF) research specialist, is forecasting MPF member account balances will reach approximately $267,000 in January; an all time high (See chart 1). Bolstered by expected January investment earnings of $53.12bn, MPF Ratings expects the average account balance for MPF’s 4.46m members to be approximately $267,000 and the MPF system to record an all-time high asset size of $1.19tr (Also see Chart 1) in the first month of 2021. MPF Ratings has also forecasted that the MPF industry will generate an average monthly fund return of approximately 3.82% in January, largely attributed to strong returns from Hong Kong and China equities (see Table 1).
With momentum in MPF account asset growth continuing in 2021, MPF Ratings’ Chairman Francis Chung (叢川普) commented that more than ever members need to be diligent in managing their MPF, stating, “It’s great news that an estimated average of $11,900 will be added to MPF member accounts in January and average account balances are at an all-time high of $267,000, however last year’s almost unprecedented volatility should be a lesson for all members. Timing markets, especially without professional assistance can be dangerous, and with account balances at record levels there is now more to lose than ever before if bad investment decisions are made. Diversification and investing for the long term are key and if members’ manage MPF sensibly, a record and growing average account balance of $267,000 can be a good springboard for meeting their needs in retirement.”
Chart 1: Average MPF account balance per member and MPF total assets
Source: MPF Ratings and MPFA
Table 1: Forecasted average investment returns by MPF asset class for January 2021
Source: MPF Ratings