Two sponsors prized as bullish members steer their MPF contributions

16 April 2021

Insurance titans monopolize MPF’s 1st quarter fund flows

MPF Ratings’ March MPF Asset Class Fund Flows Summary has now been uploaded to MPF Ratings’ media education portal.

Key points are as follows:

  • MPF attracted $11.26bn in net inflows in the first quarter of 2021 to reach an asset size of HK$1.17tr  (See Table 1), the equivalent of $262,235 per member.
  • MPF member confidence in local and regional equities is high. Hong Kong/China equities and Asian equities attracted a combined 88.9% of 1st quarter 2021 net-inflows (Also see table 1).
  • MPF members’ confident outlook further evidenced by outflows from Money Market Funds, Bond Funds and Guaranteed funds (Also see table 1).
  • Manulife and Sun Life dominate MPF fund flows in 1st quarter 2021, attracting almost 87% of MPF’s net inflows (See Table 2).
  • Such was the dominance of Sun Life and Manulife, no other MPF Scheme Sponsors registered double digit fund flows, while 6 out of the 18 MPF Scheme Sponsors registered net outflows (Also see Table 2).

MPF Ratings Ltd, Hong Kong’s independent Mandatory Provident Fund (MPF) research specialist today released their 2021 first quarter MPF Asset Class Fund Flows Summary by highlighting the increasing dominance of insurance titans Manulife and Sun Life in the MPF market place as the latest MPF fund flow data indicated MPF member confidence that equity markets will continue to outperform in 2021 especially in Asia, with Hong Kong and China equities leading the way.

When releasing its fund flow report, MPF Ratings noted that Manulife and Sun Life attracted $86.70 for each $100 of MPF contributions (See table 2), while Hong Kong/China equities and Asian equities combined to attract almost 90% of MPF’s net contributions (See table 1).  Such a high concentration of MPF contributions in the hands of a couple of MPF sponsors and asset classes shows a structural change in MPF’s landscape, that’s the view of MPF Ratings’ Chairman Francis Chung (叢川普) who commented that MPF members are showing clear conviction with their MPF account balances, “More than ever MPF members can make their own MPF decisions. A combined 87% share of net MPF fund flows for Sun Life and Manulife reflects a duopoly developing within MPF, a dominance which can only be broken by other MPF providers offering better value and services. Failure to do so will see these two insurance giants dominate the MPF landscape even further.  Additionally, as free as members are to switch MPF schemes, so too is their decision to move their MPF within asset classes.  To see 88.9% of MPF’s 1st quarter net-inflows go into Asian, and Hong Kong and China equities, reflects confidence not only in equities but also in the region in general.”

Table 1: MPF Assets ranked by Quarterly Fund Flows as at 31 March 2021 (by Fund Types)

Source: MPF Ratings

Table 2: MPF Assets ranked by Quarterly Fund Flows as at 31 March 2021 (by MPF Scheme Sponsor)

Source: MPF Ratings

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