Unexpected asset class propelling 2023 MPF returns

26th April 2023

Forecasted April loss hides strong returns in least expected market

Key points are as follows:

  • MPF returns are forecasted to fall in April. Average investment loss (as at 21st April) is -0.53% (as measured by the MPFR All Fund Performance Index), but MPF’s year-to-date performance is forecasted to remain positive at 3.51%.
  • April’s investment loss is estimated to be -$17.1bn or -$3,700 per MPF’s 4.69m members and reduces year-to-date investment gains to $5,400 per member.
  • Total MPF assets are presently forecasted to end April 2023 at approximately $1.096tr, or an average account balance of $233,500 (down -$2,800 from the previous month but up $9,500 year-to-date after factoring in contributions) per MPF’s 4.69m members.
  • April’s best and worst performing asset classes are forecasted to be equities. Hong Kong and China equities, as at 21st April are down -2.92% (as measured by the MPFR Equity Fund (HK & China) Index) while European equities is estimated to be up 3.07% to record its best start to a calendar year since 2006.

Francis Chung (叢川普), Chairman of MPF Ratings Ltd, Hong Kong’s independent provider of MPF research, views and education highlighted that, despite an estimated forecasted monthly loss of -0.53% (as measured by MPF Ratings’ MPFR All Fund Performance Index) for April, an under invested MPF asset class has been the driver behind MPF’s current positive year. Taking into consideration the forecasted April loss and after factoring in contributions, MPF is expected to end April at approximately $1.096tr in size, or the average equivalent of $233,500 per MPF’s 4.69m members.


A decline in April will not dent MPF’s strong start to the year

“While MPF is forecasted to record a loss in April it is still up for the year and on track to produce positive results for members this calendar year.”

European equities are having their best start since 2006

“Despite concerns over the European banking system in March, European equities is set to record its 4th consecutive positive return month and a year-to-date return of 14.56%, the best start for European equities since 2006.”

Strong European equity performance highlights the importance of diversification

“Given the catalogue of negative news coming out of Europe over the recent past it will surprise many that the region’s equity markets have performed so well. Timing markets on news and events are not the keys that unlock long term wealth creation. Europe’s strong performance serves to remind MPF members to be diversified and invested for the long term.”

Table 1: MPF Ratings’ MPFR Index returns by asset class (as at 21st April 2023)

Source: MPF Ratings

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