July MPF results reinforce key MPFA annual report message

3rd August 2023

Investment gains add $32bn as equity markets produce positive results

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

Key points are as follows:

The MPF system produced an average July investment gain of 2.91% (as measured by the MPFR All Fund Performance Index) to take year-to-date investment gains to approximately 6.07%.
In absolute dollar terms July’s investment gain was $32.4bn (or $6,900 per MPF’s 4.69m members), contributing to a total year-to-date increase of approximately $64.6bn, or the equivalent of 13,800 per member.
After factoring in investment gains and contributions, total MPF assets at the end of July 2023 are at approximately $1.148tr (up $97.0bn since beginning of 2023), or an average MPF account balance of $244,600 (up $7,800 for the month of July and up $20,700 year-to-date).
All MPFR equity fund indices produced positive returns in July with local equities being MPF’s best performing asset class producing a return of 7.00% (as measured by MPFR Equity Fund (HK and China) Index), a second consecutive month of positive performance.
Strong showing by MPF’s equity and mixed asset categories reinforces key data highlighted in MPFA’s recently released 2022-2023 annual report which pointed out that “80% of [MPF assets] are invested in equity funds and mixed asset funds and these two types of funds have on average, grown by 140% and 125% from the launch of the MPF system.”

Francis Chung (叢川普), Chairman of MPF Ratings Ltd, Hong Kong’s independent provider of MPF research, views and education today released MPF Ratings’ July MPF performance survey by highlighting strong across the board performance which saw investment gains totaling $32.4bn added to MPF accounts. After factoring in investment gains and contributions, MPF total assets ended July 2023 at $1.148tr or an average of $244,600 for each of MPF’s 4.69m members.

Quotes:·

Strong performance across equity markets

“Strong performances across equity markets saw $32.4bn of investment gains added to the MPF system in July. After factoring in contributions, MPF total assets ended July 2023 at $1.148tr. The good news for MPF’s 4.69m members is the average MPF account balance is now $244,600.”

Welcome news for the MPFA

“The strong performance of equity funds and mixed asset funds is welcome news for the MPFA who in their recently released 2022-2023 annual report specifically emphasized the important role equity and mixed asset funds play, noting that ‘80% of [MPF assets] are invested in equity funds and mixed asset funds and these two types of funds have on average, grown by 140% and 125% from the launch of the MPF system’.”

MPF’s outlook for the rest of 2023

“MPF’s best performing July’s asset class was Hong Kong and China equities. With almost 21% of total MPF assets, the performance of local equity markets is pivotal to MPF’s performance momentum, but given ongoing concerns over global and domestic inflation, interest rates and economic growth there appears little directional clarity. Such uncertainty reinforces the importance of diversification and long term investing.”

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