How much money really went into MPF in 2022?

19th January 2023

Highly anticipated MPF fund flow data now available

MPF Ratings’ 2022 MPF Asset Class Fund Flows Summary has now been uploaded.

Key points are as follows:

MPF fund flow data is a proxy for MPF system confidence.
MPF’s 2022 investment loss was approximately -15.66% while market size and the average account balances for 4.57m members ended 2022 at approximately $1.051tr and $229,800, down -11.06% and -10.81%, respectively.
Despite the 2nd worst performance year on record, MPF saw 2022 estimated annual net inflows exceed $56bn (See Table 1), +19.82% higher than 2021.
While only 5.9% of the total market, the DIS Core Accumulation Fund category attracted 13.6% of total net inflows suggesting members are heeding MPFA guidance to focus on long term diversified investing. (Also see Table 1)
Strong inflow growth reflects confidence and trust in Hong Kong’s mandatory pension system as a cost effective retirement savings platform.

MPF Ratings Ltd, Hong Kong’s independent Mandatory Provident Fund (MPF) research specialist today released its 2022 MPF Asset Class Fund Flows Summary by highlighting the system’s strong net inflow growth against the backdrop of 2022’s investment losses. When asked why 2022 MPF net inflows were surprisingly strong, MPF Ratings’ Chairman, Francis Chung (叢川普), said it may reflect confidence and trust in a mandatory pension system, that despite misconceptions, is actually a cost effective retirement savings platform.

Quotes:

Inflow winners and losers

“While Manulife and Sun Life continue to attract the lion’s share of MPF net inflows, HSBC ended the year strongly, attracting 40% more net inflows in the final quarter than their 2022 average.” (See Table 2)

Strong inflows reflect confidence and trust in a robust, cost effective retirement savings platform

“While the MPF system saw investment losses of around -15% in 2022, inflows were up almost 20% from the previous year. Investment losses are outside the control of MPF, however strong inflow contributions may reflect confidence and trust in a robust, cost effective retirement savings platform.”

Support for DIS suggests members are heeding the message to focus on long term diversified investing

“Every MPF scheme offers Default Investment Strategy (DIS) funds. They’re low fee ready-made diversified fund options. Positively, the latest inflow data shows a good amount of contributions going into DIS suggesting members are heeding MPFA guidance to focus on a long term diversified investing strategy.”

Table 1: MPF Asset Class Net Fund Inflows as at 31 December 2022