27th January 2023
Can HK/China equities create history?
Key points are as follows:
- After considering contributions and estimated market returns, MPF’s average member account balance is expected to increase by 7.84%, or $18,000, to an estimated $247,900 for MPF’s 4.57m members.
- Total MPF assets are expected to end January 2023 at approximately $1.134tr.
- MPF’s January average investment return is expected to be around 5.1% (as measured by the MPFR All Fund Performance Index).
- HK/China equities (as measured the MPFR Equity Fund (HK & China) Index) are on track to deliver its first positive double digit January return since MPF’s inception.
- US equity’s January return lags HK/China reinforcing the MPFA’s November 2022 circular announcing efforts to promote investment diversity to meet the pre and post retirement needs of MPF members.
Francis Chung (叢川普), Chairman of MPF Ratings Ltd, Hong Kong’s leading independent provider of MPF research, views and education is forecasting that, after factoring in contributions, MPF will end January at approximately $1.134tr in size, or the average equivalent of $247,900 per MPF’s 4.57m members. January’s MPF average investment return at time of writing is estimated at 5.1% (as measured by MPF Ratings’ MPFR All Fund Performance Index).
Quotes:
Strong January as MPF begins the Year of the Rabbit with hop
“On the back of strong local equity market performance, MPF is set to start the Year of the Rabbit with a hop. This is good news for MPF’s 4.57m and offers members cautious optimism that 2023 may be a prosperous year.”
HK/China equities may produce its first double digit January return on record
“HK/China equities are on track to record its first ever January double digit positive return since MPF’s inception as markets react positively to China’s re-opening and ongoing COVID-19 policy relaxations.”
“If you chase two rabbits, you’ll catch neither”.…While China performs, US lags.
“While HK/China equity is performing strongly, US equity is lagging. Some MPF members have historically switched between both markets, but the Year of the Rabbit is a timely reminder that ‘if you chase two rabbits, you’ll catch neither’ and validates the MPFA’s recent initiative to review its fund approval process to promote better diversity to meet the needs of MPF members.”
What should MPF member do?
“MPF Ratings supports the MPFA’s efforts to promote better diversity. The decision to choose which fund is ‘best’ is difficult but every MPF scheme offers Default Investment Strategy (DIS) funds. They’re low fee ready-made diversified fund options that are sensible long term option for most MPF members to consider.”
Table 1: MPF Ratings’ MPFR Index returns by asset class (as at 19th January 2023)
Source: MPF Ratings
