Sharp decline wipes out 2021 Hong Kong equity gains

4th August 2021

Biggest MPF loss since pandemic recovery

MPF Ratings’ July MPF Performance Survey has now been uploaded.

Key points are as follows:

• MPF Ratings’ MPFR All Fund Performance Index recorded a loss of -2.18% in July (See Table 1), as sharp July local equity losses wipe out year-to-date gains in Hong Kong and China equities.
HK & China Equity Funds produced their worst 1-month loss since October 2018 as MPF Ratings’ MPFR Equity Fund (HK & China) Index recorded a 1-month loss of -9.54% (also see Table 1) resulting in a year-to-date loss of -5.02%, the worst year-to-date loss in 13 years.
• Investment loss is estimated to be -$37.933bn for the month of July, the biggest 1-month loss since March 2020. An equivalent average investment loss of -$8,400 per member.
Total MPF assets dropped to an estimated $1.188tr and after factoring in MPF contributions, MPF average account balances are expected to decrease to $261,000.
US Equity Funds and European Equity Funds are amongst the best performers for July and on a year-to-date basis (also see Table 1). The year-to-date performance difference between HK and China, and the US and Europe is now a staggering 21.97% and 18.54% respectively.

Francis Chung (叢川普), Chairman of Hong Kong’s specialist independent MPF research group, MPF Ratings today released MPF Ratings’ July MPF Performance Survey by confirming July’s big decline in the Hang Seng Index (HSI) not only saw 2021 MPF gains in Hong Kong and China MPF equity funds wiped out but was also the major contributor to an average MPF investment account loss of -$8,400. The one bright spot was for MPF members invested outside Hong Kong and China as Global, US and European equities continued to benefit from strong growth in those markets.

On the performance of Hong Kong and China equities

“Hong Kong and China equity performance is pivotal to MPF accounts. MPF Ratings’ Equity Fund (Hong Kong and China) Index fell -9.54% in July, wiping out all its 2021 gains and is the biggest factor contributing to an average monthly investment loss per member of -$8,400 and now sees average MPF account balances fall to $261,000.”

On the performance of US and European equities

“While MPF Ratings’ Equity Fund (Hong Kong and China) Index fell -9.54% in July, the Equity Fund (US) and Equity Fund (Europe) indices both continued to rise. The performance difference since the beginning of the year between HK and China, and the US and Europe is now 21.97% and 18.54% respectively. The staggering performance difference highlights the importance of diversifying into a broad range of markets.”

Table 1: 1-month and year-to-date MPFR Index returns as at 31 July 2021

Source: MPF Ratings

Table 2: 10 best performing MPF constituent funds for the month of July 2021

Source: MPF Ratings

Table 3: 10 best performing MPF constituent funds for year-to-date 2021

Source: MPF Ratings

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