US equities attracts historic levels of MPF assets

15th September 2021

Leading MPF commentator strikes cautious tone as MPF members overlook defensive assets

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

Key points are as follows:

  • MPF’s total assets increased 1.19% in August (from $1.187tr at end of July to $1.201tr), the equivalent average MPF member account balance size of approximately $264,000 per MPF’s 4.5m members, up from $261,000 in the previous month.
  • Total MPF net inflows remained robust in August, recording a total net inflow of $3.604bn (Also see Table 1).
  • US Equity Funds attracted 53.6% of MPF’s net inflows in August (Also see Table 1), it’s highest share of MPF inflows on record.
  • All equity asset classes (US, Global, European, Asian, and HK/China Equity Funds) attracted a combined net inflow share of 118.2% (Also see Table 1).
  • Defensive asset classes (Money Market, Guaranteed and Bond funds) continued to suffer outflows recording a combined net outflow share of -35.2% (Also see Table 1).

MPF Ratings Ltd, Hong Kong’s independent Mandatory Provident Fund (MPF) research specialist today released their August MPF Asset Class Fund Flows Summary by highlighting record monthly inflows into MPF’s US equity fund category.

When releasing MPF Ratings’ monthly MPF Asset Class Fund Flows Summary, Francis Chung (叢川普), Chairman of MPF Ratings noted that despite US equities only having a 4.8% share of total MPF assets, the asset class attracted 53.6% of MPF’s August net inflows, making it MPF members’ 2nd favourite asset class, on a net inflow basis, behind Hong Kong and China equities for the year.

MPF inflows reflect optimism in equities

“Despite US equities only having a market share of 4.8%, it attracted over 10x that share in MPF net inflows in August. This shows MPF members not only have confidence in the US share market but with all equity categories combining to produce a net inflow share of 118.2%, and with Money Market Funds again seeing net outflows, it’s clear MPF members see equities as the best place to invest.”

MPF Ratings’ Chairman urges caution

“Large MPF contributions being invested in equities at the expense of conservative and diversified mixed asset funds suggests MPF members are ignoring diversification benefits. There are several external factors which may impact markets in the short term. The Delta variant, inflation concerns, and question marks over global growth all have the potential to increase market volatility, and with record amounts being invested in equities we would urge MPF members to be cautious and remain diversified and focused on long term wealth creation.”

Table 1:  MPF Asset Class Fund Flows as at 31 August 2021

Source: MPF Ratings

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