Returns take a back seat as spotlight put on MPF

27th March 2023

Current banking crisis highlights the value of secure retirement savings system

Key points are as follows:

  • Despite European and the US banking concerns affecting global markets, MPF expected returns for March are expected to be modestly up. Average investment gain as at 22nd March is 0.11% (as measured by the MPFR All Fund Performance Index).
  • March equity market declines are being offset by bonds which, at the time or writing, are up 2.65% (as measured by the MPFR Bond Fund Index), placing them on track to produce their best quarter since Q1 2016.
  • Total MPF assets are presently forecasted to end March 2023 at approximately $1.088tr (up 1.07% for the month and 3.50% for the quarter), or an average account balance of $232,000 (up $2,500 for the month and $7,800 for the quarter) per MPF’s 4.69m members.
  • Recent European and US actions to restore banking confidence and protect customer deposits emphasizes the value and necessity of a strong and secure retirement savings system.

Francis Chung (叢川普), Chairman of MPF Ratings Ltd, Hong Kong’s independent provider of MPF research, views and education emphasized the value and necessity of a strong and secure retirement savings system while announcing that, after factoring in contributions, MPF is expected to end March at approximately $1.088tr in size, or the average equivalent of $232,000 per MPF’s 4.69m members. March’s MPF average investment return at time of writing is estimated to be 0.11% (as measured by MPF Ratings’ MPFR All Fund Performance Index), taking MPF year-to-date investment gains to 1.60%.


March’s forecasted modest gains sees MPF on track to produce year-to-date gains in 2023 but markets are highly volatile

“As a result of a forecasted modest gain in March, MPF is on track to produce positive year-to-date gains which will see average member account balances rise to $232,000 inclusive of contributions, however markets are highly volatile due to ongoing US and European banking system uncertainties, a by-product of interest rate increases designed to balance inflation and economic growth expectations.”

Concerns over European and US banking situation highlights the value and necessity of a strong and secure retirement savings system

“Emergency actions to restore confidence and protect customer deposits within the European and the US banking system emphasizes the value and necessity of a strong and secure retirement savings system.”

How well protected are MPF member retirement savings?

“Protection of savings is the foremost consideration for retirement saving. As evidenced by the MPFA’s announcement that the MPF system’s exposure to Credit Suisse’s AT1 bonds is ‘almost zero’, the current banking crisis highlights the proficiency of MPF. MPF members can have full confidence that MPF is highly robust and highly secure in its ability to safeguard member assets operationally.”

Table 1: MPF Ratings’ MPFR Index returns by asset class (as at 22nd March 2023)

Source: MPF Ratings

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