MPF account values to rebound in October

28th October 2021

But not all members benefit as performance gap widens to all-time record level

Key points are as follows:

  • Forecasted MPF account balances expected to rebound from September losses. Factoring expected gains and MPF contributions, total MPF assets at the end of October are expected to increase $26bn from $1.167tr as at end of September to $1.196tr or $263,000 per MPF member.
  • Collective investment gains are expected to total $26bn in the month of October, equivalent to an average gain of $5,700 for MPF’s 4.5m members.
  • A $5,700 average gain per member will be the highest MTD dollar gain this calendar year but does not recover the $8000 loss incurred in September.
  • MPF Ratings is reporting that after 4 consecutive months of losses, HK and China Equity Funds are expected to produce a positive return for the month of October.
  • Despite an improvement in local equity performance the YTD return difference between HK and China Equity Funds and US Equity Funds remains at elevated levels. A forecasted difference of over 25% is the widest 10 calendar month difference since MPF’s launch.

Francis Chung (叢川普), Chairman of Hong Kong’s specialist independent MPF research group, MPF Ratings, today announced that his organization expects MPF members to achieve 2021’s highest average investment gain in the month of October, recovering some of the average $8,000 loss suffered last month.

MPF Ratings is expecting the MPF system to deliver a total gain of approximately $26bn in October, the equivalent of an average gain of $5,700 per member and the highest average investment gain so far in 2021.  After factoring contributions MPF account balances are forecasted to stand at $263,000 per member.

Market rebound gives MPF account holders a boost

“With 23% market share, Hong Kong/China equities is MPF’s single most important asset class, and after four months of consecutive losses, the likelihood of positive returns from Hong Kong and China equities in October will be welcome news for MPF members.”

Hong Kong/China and US equities return difference still at elevated levels

“Despite the likelihood of positive returns from Hong Kong and China equities, we continue to see risks. These risks are reflected in the relative return difference between HK/China equities and US equities, where the year-to-date performance differential is still at elevated levels. MPF Ratings is forecasting the October year-to-date return differential will be over 25% which will be the widest 10 month year-to-date difference since MPF’s inception.”

Table 1: MPF fund average investment returns by asset class (as of 25th October 2021)

Source: MPF Ratings

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