MPF’s worst quarterly loss in two years

6th April 2022

“March Madness” adds to MPF’s $76bn loss

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

Key points are as follows:

March MPF loss totalled -$15bn as the system recorded a quarterly loss of -$76.2bn. The worst quarterly loss in two years.
On a per member basis, average losses exceeded -$3,200 in March and -$16,600 for Q1 2022 per MPF’s 4.6m members while total MPF assets ended March at $1.119tr (approximate account balance of $243,900 per MPF member), down -5.35% from $1.182tr at end of 2021 (or $257,700 per member).
MPFR All Fund Performance Index, as measured by average investment return of MPF funds, was down -1.49% in March and -6.12% in Q1 2022 (See Table 1).
HK and China equities was the worst performing asset class for March and YTD, reporting investment losses for a 3rd consecutive quarter, and a 9th loss over 12 months (See Chart 1).

Hong Kong’s specialist independent MPF research group, MPF Ratings, announced that after a highly volatile March, the MPF system recorded a monthly loss of -$15bn to bring MPF’s accumulated 2022 loss to -$76.2bn, MPF’s worst quarter in two years. Francis Chung (叢川普), MPF Ratings’ Chairman, pinpointed poor Hong Kong and China equity performance as the biggest contributor to MPF’s ongoing losses.

Quote(s):

Hong Kong and China equities have now recorded 9 monthly losses in the past 12 months significantly hurting MPF members

“Hong Kong and China equities have now not only recorded a loss in every month of 2022, but it has also lost money in 9 of the past 12 months. As MPF’s biggest asset class, the losses hurt the majority of MPF members.”

Markets unlikely to rebound in the short term as recession fears add to market volatility

“March saw US 10yr Treasury yields invert for the first time since 2019 adding to recession and stagflation concerns. Our expectation is that, without resolutions to the growing risks to financial markets, markets will remain extremely volatile in the next three months.”

Remaining diversified and invested

“With volatility expected to remain high MPF members should not panic. Market timing is difficult especially in unpredictable markets, but remaining invested, well diversified, and focused on long term retirement goals should be the objective of all MPF members.”

Table 1: 1-month and quarterly MPFR Index returns as of 31 March 2022