Market volatility trims MPF gains

29th June 2021

Past 5 quarter results surprise MPF members

Key points are as follows:

  • MPF Ratings is forecasting the MPF system to produce positive MPF investment gains for the 2nd quarter of 2021; a 5th consecutive quarterly gain.
  • Quarterly investment gains are expected to reach $43.204bn for the June quarter, an equivalent average investment gain of $9,510 per member.
  • Total MPF assets are expected to reach an all-time record of $1.225tr.
  • After factoring in MPF contributions MPF average account balances are expected to reach $269,696 at 30th June 2021. Also an all-time record.
  • Strong non-Asian equity market performance was the key to strong MPF performance in the June quarter. US, European and Global Equities are amongst the best performers (See Table 1).

Francis Chung (叢川普), Chairman of Hong Kong’s specialist independent MPF research group, MPF Ratings, today reported that, despite rising market volatility in May and June, MPF is on track for a 5th consecutive quarter of positive returns. At the time of writing MPF Ratings stated that based on current market conditions the MPF system was expected to produce a modest positive return for the month of June, and over the quarter MPF members would be rewarded with an average investment gain of $9,510 in their accounts, driven by strong US, European and Global equities.

5 consecutive quarters of positive returns highlights the importance of longer term investing

“Despite the market volatility seen in the past couple of months MPF will see 5 quarters of positive performance.  In June MPF members should see another $9,510 of quarterly investment gains added to their MPF accounts, taking MPF’s total investment gains over the past 5 quarters to around $65,000, and contributing nearly 25% of MPF’s all-time record high average account balance, which will stand at approximately $270,000 for Hong Kong’s 4.5m Hong Kong workers. The significant investment gain contribution reinforces the importance of diversification and long term investing.”

Table 1: MPF fund average investment returns by asset class (as at 25 June 2021)

Source: MPF Ratings

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