6th July 2022
MPF PROVEN TO BE STRONG DEFENDER AGAINST INFLATION SINCE INCEPTION
MPF Ratings’ June MPF Performance Survey has now been uploaded.
Key points are as follows:
- MPF Ratings’ MPFR All Fund Performance Index lost -3.02% in June, -7.29% for the June quarter, and -12.96% for the first 6 months of 2022 (See Table 1), the worst first half return since MPF’s inception.
- After factoring in MPF contributions, the average MPF member account balance is expected to fall to $230,500 at end of June, a decline of -$27,200 from 31 December 2021 ($257,700).
- Despite the difficult investment environment there are a number of positives:
- Total MPF assets remain above the psychologically important $1tr level, at approximately $1.057tr.
- Despite the downturn MPF is still creating real wealth – outperforming Hong Kong inflation since inception (See Chart 1).
- Hong Kong/China equities performance turnaround. The only asset class to produce positive performance in June and Q2 2022 (Also see Table 1).
- MPF fees have fallen 20% over the past decade from a FER of 1.74% to 1.39%.
- History suggests we are near a market bottom and markets reward long term investors (See Chart 2).
MPF Ratings, Hong Kong’s specialist independent MPF research group, released its June MPF Performance Survey by first acknowledging that 2022 year to date has seen MPF produce its worst start to a calendar year ever before highlighting a number of positives in a difficult investment environment.
In releasing MPF Ratings’ latest performance survey, its Chairman, Mr Francis Chung (叢川普) made the following observations:
MPF member assets are held within a highly secure and robust system
“Turmoil in global markets has seen MPF produce its worst first half year return since MPF’s inception. While this is disappointing news for all MPF members it’s important for members to understand that investment losses, and gains, are a function of financial markets, not the MPF system. The MPF system, despite disappointing investment losses, remains highly secure and robust. The protection of MPF member money is assured”.
Despite the extraordinary losses are there positives?
“Despite the losses in MPF member accounts, total assets still stand above the psychologically important $1 trillion level and average individual member account balances are still at a healthy $230,000. While this is down its peak, history teaches us that even when we see significant market declines, markets ultimately reward investors over the long term”.
MPF Ratings continues to emphasize long term investing, diversification and topping up MPF account balances at lower asset prices
“MPF Ratings has consistently stressed that time in markets, not market timing, is the key to unlocking long term wealth creation. Falling markets offers an opportunity to invest in quality assets at lower prices. Members should remain invested and diversified, maximizing the compounding effect that sees wealth grow exponentially over their working life.”
Table 1: 1-month, quarterly and half-yearly MPFR Index returns as at 30 June 2022
Chart 1: Cumulative Performance of MPFR All Fund Performance Index vs Hong Kong Inflation since MPF’s inception (base = $100)
Chart 2: Cumulative Performance of MPFR All Fund Performance Index since MPF’s inception and after losses exceeding -10%
Table 2: 10 best performing MPF constituent funds for the month of June 2022
Table 3: 10 best performing MPF constituent funds for June Quarter 2022
Table 4: 10 best performing MPF constituent funds for first half of 2022
Table 5: 10 worst performing MPF constituent funds for the month of June 2022
Table 6: 10 worst performing MPF constituent funds for June Quarter 2022
Table 7: 10 worst performing MPF constituent funds for first half of 2022