Local equity markets fail to put roof over US debt ceiling

5th June 2023

MPF members see account balances shrink after 3rd monthly 2023 loss

MPF Ratings’ May MPF Performance Survey has now been uploaded.

Key points are as follows:

  • The MPF system recorded its 3rd monthly loss in 2023. The -2.94% loss (as measured by the MPFR All Fund Performance Index) reduces MPF’s year-to-date investment gain to 0.29%.
  • On an absolute basis, May’s investment loss is -$32.58bn or -$6,900 per MPF’s 4.69m members, reducing year-to-date investment gains to a modest $500 per member.
  • Factoring in contributions, total MPF assets ended May 2023 at approximately $1.078tr, or an average account balance of $229,600 (down -$6,100 from the previous month but up $5,700 year-to-date) per MPF’s 4.69m members.
  • HK & China Equity Funds, MPF’s largest asset class, recorded its 3rd biggest ever May MPF loss and is now the MPF’s worst performing asset class in 2023. The -7.88% monthly loss (as measured by the MPFR Equity Fund (HK & China) Index) takes the asset classes year-to-date loss to -8.23%.

Francis Chung (叢川普), Chairman of MPF Ratings Ltd, Hong Kong’s independent provider of MPF research, views and education highlighted disappointing Hong Kong/China equity performance and the affect US debt ceiling negotiations have had on May MPF performance as he released MPF Ratings’ May MPF performance survey.

Taking into consideration market returns and after factoring in contributions, MPF ended May at approximately $1.078tr in size, or the average equivalent of $229,600 per MPF’s 4.69m members as HK/China equities’ 3rd worst ever May monthly MPF result now sees local equities recording the system’s worst year-to-date performance by a significant margin.


HK & China equities slips to worst performing year to date performance after 3rd worst ever May performance

“With a -7.88% loss in May, HK & China equities is now MPF’s worst performing asset class for 2023 by some margin. With over 21% invested in HK & China Equity Funds, it’s the single most important asset class for MPF members. The performance of local equities has a significant impact on MPF account balances.”

May investment landscape dominated by US debt ceiling speculation

“May’s investment landscape was dominated by speculation around the outcome of US debt ceiling negotiations as uncertainties over inflation and interest rates continued.”

What should MPF members do?

“Diversification is paramount and choosing asset classes which outperform consistently over time is difficult. Fortunately, every MPF scheme offers members Default Investment Strategy (DIS) funds. They’re low fee ready-made diversified fund options and take away the challenge of selecting individual funds. They are a sensible long-term option for most MPF members to consider.”

Table 1: MPF Ratings’ MPFR Index returns by asset class (as at 31st May 2023)

Source: MPF Ratings

Table 2: 10 best performing MPF constituent funds for the month of May 2023

Source: MPF Ratings

Table 3: 10 best performing MPF constituent funds for CYTD of 2023

Source: MPF Ratings

Table 4: 10 worst performing MPF constituent funds for the month of May 2023

Source: MPF Ratings

Table 5: 10 worst performing MPF constituent funds for CYTD of 2023

Source: MPF Ratings

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