MPF falls below $1 trillion

6th October 2022

September’s equities declines highlight the importance of diversification

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

Key points are as follows:

  • Following a September MPF monthly investment loss of -$82.1 billion, MPF’s quarterly and year-to-date losses have ballooned to -$106.2 billion and -$258.9 billion respectively.
  • Monthly, quarterly and Year-to-date paper losses for MPF’s 4.57 million members are -$18,000, -$23,200 and -$56,500 per member respectively.
  • After factoring in MPF contributions, the September average MPF member account balance is approximately $211,000, a monthly, quarterly and year-to-date decrease of -$17,100 (-7.49%), -$20,300 (-8.79%) and -$46,700 (-18.11%) respectively.
  • Significantly, total MPF assets have fallen below the important $1 trillion level. At approximately $965 billion, this is the first breach of the milestone since MPF surpassed $1 trillion in July 2020.
  • Global inflation, interest rates and recession concerns continue to be the biggest market risks fuelling the current volatility.

Francis Chung (叢川普), Chairman of MPF Ratings, Hong Kong’s specialist independent MPF research group today confirmed, after much speculation, that total MPF assets had fallen below $1 trillion for the first time since the system surpassed the milestone back in July 2020.

2022 has seen a confluence of global economic and geo-political concerns plague the MPF system, which has resulted in the average MPF account balance falling by approximately $46,700 and the unwinding of two years’ worth of MPF market contributions and market gains.

Quotes:

Confluence of concerns see two years of MPF values unravel

“A global confluence of geo-political issues and economic concerns has seen MPF account balances fall to a two year low as MPF total assets fall below $1 trillion for the first time since the milestone was exceeded in July 2020.”

MPF Ratings reiterates that MPF is a highly secure and robust system

“It is important to emphasize that while average MPF member account balances are now back to June 2020 levels, accrued market losses are not a result of the MPF system. Investment gains and losses are a function of financial markets, something the MPF system does not control. The MPF system safeguards member assets and on this point MPF members can be confident that the MPF system is highly robust and highly secure.”

What should MPF members do?

“It is imperative that MPF members remain invested for the long term and remain well diversified. Every MPF scheme offers Default Investment Strategy (DIS) funds. They’re low fee ready-made diversified fund options. For the vast number of MPF members DIS remains an excellent option to consider.”

Table 1: MPF Ratings’ MPFR Index returns by asset class (as at 30 September 2022)

Source: MPF Ratings

Table 2: 10 best performing MPF constituent funds for the month of September 2022

Source: MPF Ratings

Table 3: 10 best performing MPF constituent funds for September Quarter 2022

Source: MPF Ratings

Table 4: 10 best performing MPF constituent funds for CYTD of 2022

Source: MPF Ratings

Table 5: 10 worst performing MPF constituent funds for the month of September 2022

Source: MPF Ratings

Table 6: 10 worst performing MPF constituent funds for September Quarter 2022

Source: MPF Ratings

Table 7: 10 worst performing MPF constituent funds for CYTD of 2022

Source: MPF Ratings

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