5th October 2023
Strong contributions are highlighted as leading MPF commentator defends Hong Kong’s pension system
MPF Ratings’ September MPF Performance Survey has now been uploaded.
Key points are as follows:
- The MPF system produced a September investment loss of approximately -2.76% (as measured by the MPFR All Fund Performance Index), taking MPF into loss for the first time in 2023 (See Table 1).
- Approximate investment losses by dollar value are -$30.8bn (or -$6,600 per MPF’s 4.69m members) for September, -$35.2bn (or -$7,500 per member) for Q3, and -$3.0bn year-to-date (the equivalent of -$600 per member).
- Despite the market losses, MPF total assets are still up $36.7bn year-to-date due to MPF contributions. Total MPF assets at the end of September are at approximately $1.088tr, or an average MPF account balance of $231,800 (down -$5,700 for September and -$5,100 for Q3 2023, but up $7,800 year-to-date).
- While investment losses will disappoint MPF members, MPF Ratings defends the MPF system expressing confidence in a cost effective, highly secure and well governed savings platform.
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’ September MPF performance survey which, following a difficult performance month, showed MPF falling to a 2023 year-to-date loss for the first time. With only three months of the calendar year remaining, equity losses globally have taken MPF’s accumulated year-to-date investment loss to -$3.0bn, or approximately -$600 per MPF’s 4.69m members, but thanks to contributions MPF total assets have grown $36.7bn in 2023, ending September at approximately $1.088tr or an average of $231,800 for each of MPF’s 4.69m members.
While market losses will disappoint MPF members, Mr Chung defended the MPF system, pointing out that not only is the system a rigorously governed, cost effective and a highly secure retirement savings platform, but MPF is also not the “creator” of the investment results rather it’s a “taker” of results that financial markets deliver.
Quotes:
With only 3 months left in 2023 MPF falls into year-to-date investment losses
“With only 3 months of 2023 remaining MPF falls into year-to-date losses for the first time this year. If this trend continues it will result in consecutive years of investment losses for the system.”
MPF Ratings defends the MPF system
“Performance is not in MPF’s direct control. The system is not the ‘creator’ of investment returns rather it’s a ‘taker’ of returns. What the system does however control are governance, cost and security. Against these benchmarks MPF is an excellent platform that safeguards MPF members’ assets.”
What should MPF members do and what is MPF’s outlook for the rest of 2023?
“Macro uncertainties are likely to continue to disrupt markets. To mitigate uncertainties MPF members should diversify, invest long term, and ‘dollar cost average’ by topping up MPF accounts if markets become cheaper. Investment decisions are never easy. All MPF schemes offer Default Investment Strategy (DIS) funds. They’re ready-made low fee diversified fund options and are excellent options to consider.”
Table 1: MPF Ratings’ MPFR Index returns by asset class (as at 30th September 2023)
Source: MPF Ratings
Table 2: 10 best performing MPF constituent funds for the month of September 2023
Source: MPF Ratings
Table 3: 10 best performing MPF constituent funds for Q3 2023
Source: MPF Ratings
Table 4: 10 best performing MPF constituent funds for year-to-date of 2023
Source: MPF Ratings
Table 5: 10 worst performing MPF constituent funds for the month of September 2023
Source: MPF Ratings
Table 6: 10 worst performing MPF constituent funds for Q3 2023
Source: MPF Ratings
Table 7: 10 worst performing MPF constituent funds for year-to-date of 2023
Source: MPF Ratings
