3rd November 2022
MPF’s 2022 accumulated market losses grow to over $280bn
MPF Ratings’ October MPF Performance Survey has now been uploaded.
Key points are as follows:
- October MPF monthly total market loss of -$24.7 billion takes MPF’s year-to-date accumulated losses to -$283.6 billion. MPF’s total assets now stand at approximately $944.3bn.
- October and year-to-date paper losses for MPF’s 4.57 million members are -$5,400 and -$61,900 per member respectively.
- Factoring in MPF contributions, October’s average MPF member account balance is approximately $206,500, a monthly and year-to-date decrease of -$4,500 (-2.15%) and -$51,200 (-19.87%) respectively.
- Hong Kong equity’s return to 2009 levels was the largest contributor to MPF’s total asset fall.
- While Hong Kong’s HSI fell to 2009 levels, US equities (as measured by the Dow Jones Index) had its best monthly result in October since 1976.
- Divergent asset class performances highlight the importance of diversification with the Mandatory Provident Fund Schemes Authority (MPFA)’s mandated Default Investment Strategy (DIS) funds benefiting.
Coinciding with Hong Kong’s Global Financial Leaders’ Investment Summit, Francis Chung (叢川普), Chairman of MPF Ratings, Hong Kong’s specialist independent MPF research group stated that he foresees more global investing, and the Mandatory Provident Fund Schemes Authority’s (MPFA) mandated Default Investment Strategy (DIS) funds could be MPF members’ ideal platform to do so.
An important lesson for MPF members
“October has taught MPF members an important lesson. As Hong Kong’s HSI returned to 2009 levels, the US market’s Dow Jones Industrial Index had its best month since 1976. This divergence highlights why diversification is essential.”
DIS’ success has gone unnoticed
“From a standing start 5 years ago, DIS now accounts for 8% of MPF’s total market share and ranks 3rd in MPF net inflows. Its popularity amongst MPF members has virtually gone unnoticed.”
DIS as MPF system’s diversification catalyst
“All MPF schemes offer Default Investment Strategy (DIS) funds. Their low fees are often highlighted but its diversification benefit is as important. DIS’ primary fund, the Core Accumulation Fund, invests broadly in global equities, including the US equity market. The benefit of this was seen in October where the fund option produced positive returns compared to other mixed asset options and local equities.”
Table 1: MPF Ratings’ MPFR Index returns by asset class (as at 31 October 2022)
Source: MPF Ratings
Table 2: MPF Asset Class Net Inflows (as at 30 September 2022)
Source: MPF Ratings
Table 3: 10 best performing MPF constituent funds for the month of October 2022
Source: MPF Ratings
Table 4: 10 best performing MPF constituent funds for first 10 months of 2022
Source: MPF Ratings
Table 5: 10 worst performing MPF constituent funds for the month of October 2022
Source: MPF Ratings
Table 6: 10 worst performing MPF constituent funds for first 10 months of 2022
Source: MPF Ratings
