2022 investment losses expected to reach -$190bn

22nd December 2022

But smaller than forecasted fall in MPF’s asset size highlights the significance of MPF contributions

Key points are as follows:

  • December falls in US and Global equities are expected to take MPF’s estimated 2022 full year loss to -$190.7bn or approximately -16.15%.
  • After factoring in MPF contributions, December average member account balances are expected to increase modestly to approximately $228,600, translating to an estimated annual decline of-$29,000.
  • With markets expected to remain quiet over the festive season, total MPF assets are expected to end 2022 down 11.5% for the year, at approximately $1.046tr.
  • HK/China equities (as measured the MPFR Equity Fund (HK & China) Index) is on track to consolidate its best monthly return since MPF’s inception with a second consecutive positive month in December.
  • Despite finishing 2022 positively, HK/China equities together with US equities are expected to be amongst MPF’s worst performing 2022 asset classeswith losses of approximately -20% each. The last, and only time this occurred during MPF’s history was 2008.

Leading independent provider of MPF research, views and opinions, MPF Ratings Ltd, is forecasting that, after factoring in contributions, MPF will end 2022 down 11.5% with regular MPF contributions somewhat compensating for accumulated investment losses which are expected to total -$190.7bn.

Francis Chung (叢川普), MPF Ratings’ Chairman, expects the MPF system to close out 2022 at a total size of approximately $1.046tr, or the average equivalent of $228,600 per MPF’s 4.57m members. 


2022 is an exception not the norm

“2022 has proven to be a difficult year with a long list of factors, headlined by rising inflation and interest rate increases, impacting all financial asset classes. Indeed, only once before has MPF seen HK/China and US equities simultaneously produce -20% losses. History will show 2022 was an exception not the norm.”

Cautious optimism for 2023

Despite producing forecasted losses of around -20% for 2022, HK/China equities, MPF’s largest asset class is on track to produce a second consecutive month of good performance giving it momentum going into 2023. Such momentum is cause for cautious optimism.”

Member account balances – A savings safety net

“While members may be disappointed with 2022 results it would be remiss to not highlight that a forecasted average MPF account balance of $228,600, is still sizeable.  From a standing start of zero, MPF has grown into a meaningful retirement savings pool. A retirement savings safety net members otherwise would not have had.”

What should MPF member do?

“MPF Ratings reiterates that diversification, long-term investing, and topping up contributions in falling markets are key to long term wealth creation. Every MPF scheme offers Default Investment Strategy (DIS) funds. They’re low fee ready-made diversified fund options and remain an excellent long term option for MPF members to consider.”

Table 1: MPF Ratings’ MPFR Index returns by asset class (as at 19th December 2022)

Source: MPF Ratings

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