April makes fools of MPF’s 4.5m members

26th April 2022

MPF’s worst ever start is no joke

Key points are as follows:

  • April sees MPF on track to record its worst ever calendar year start (See Chart 1).
  • MPF’s monthly loss expected to exceed -$64.4bn taking 2022 year-to-date losses beyond -$140.6bn (See Chart 2).
  • Average MPF member loss expected to exceed -$14,000 in April and -$30,600 YTD.
  • Total MPF assets are on track to fall to $1.060tr by end of April (approximate account balance of $231,200 per MPF member), down -5.39% from $1.121tr at end of March (or $244,400 per member) and -10.27% from $1.182tr at end of 2021 (or $257,700 per member).
  • Average MPF fund investment returns are down -3.57% month-to-date and -9.41% YTD (See Table 1).
  • HK and China equities is the worst performing asset class for the month and YTD (Also see Table 1) recording investment losses for 10th months out of the last 12.

Hong Kong’s specialist independent MPF research group, MPF Ratings, is forecasting an estimated loss of -$64.4bn loss in April to bring MPF’s 2022 loss to a staggering -$140.6bn with Francis Chung (叢川普), MPF Ratings’ Chairman, highlighting the magnitude of MPF’s year-to-date is the biggest recorded since the system’s inception in December 2000.

Quote(s):

Worst ever start to a calendar year

“This is MPF’s worst ever start to a calendar year. MPF is expected to deliver an estimated loss of around $64.4bn in April alone. Adding to the consecutive monthly losses since January, MPF’s accumulated 2022 losses have ballooned to an estimated $140.6bn.”

Putting MPF’s 2022 $140.6bn loss into perspective. “It’s equivalent to losing two years worth of savings”

“A $140.6bn loss is shocking and equivalent to every member losing approximately -$30,000 or roughly two month’s average salary. If one assumes a 10% savings rate, that’s two years worth of savings that an average MPF member has lost.” 

Ongoing issues continue to undermine MPF member confidence

“Investor confidence continues to be undermined by European instability, inflation and interest rate fears, and the impact of the current Mainland coronavirus situation.  MPF’s biggest asset class, Hong Kong/China equities, has now produced a negative return in 10 out of the past 12 months which highlights the difficulty of market timing and serves to reinforce the importance of being well diversified and focused on long term investing.”

Chart 1: MPF fund average CYTD investment returns since MPF’s launch

* As of 21st April 2022

Source: MPF Ratings

Chart 2: MPF 1-month and CYTD accumulated investment losses in 2022

* MPF Ratings estimate

Source: MPF Ratings

Table 1: MPF fund average investment returns by asset class (as of 21st April 2022)

Source: MPF Ratings

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