MPF reaps $43.9bn investment bonanza but one group misses out

5th December 2023

November’s big turnaround puts spotlight on diversification

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

Key points are as follows:

With a November investment gain of approximately 4.13% (as measured by the MPFR All Fund Performance Index) the MPF system produced its best monthly investment result since January, returning MPF back to year-to-date positive investment territory (See Table 1).
By dollar value the investment gain was approximately $43.9bn (or $9,400 per MPF’s 4.69m members) taking year-to-date investment gains to $13.1bn (or $2,800 per member).
Factoring in contributions, MPF Ratings expects total MPF assets to end November at approximately $1.11tr, the equivalent of a $236,800 average MPF account balance (up $10,200 for November and $12,900 year-to-date), and also the highest level since end of August 2023.
US equities (as measured by the MPFR Equity Fund (US) Index) was November’s best performing asset class, outperforming HK & China equities (as measured by the MPFR Equity Fund (HK & China) Index) by 8.81% to take the year-to-date return difference to 31.28% (also see Table 1), the 2nd widest year-to-date difference between both markets since MPF’s inception.
Diverging HK & China and US equity returns reinforce the importance of diversification as DIS produces its best monthly 2023 result due to its relatively higher exposure to US equities and lower local equities allocation compared to other MPF Mixed Asset fund options.

Francis Chung (叢川普), Chairman of MPF Ratings Ltd, Hong Kong’s independent provider of MPF research, views and education highlighted MPF’s largest beneficiary and laggard from November’s strong equity market rebound when he released MPF Ratings’ November MPF performance survey.

Mr Chung announced that the MPF system delivered a November market return of 4.13% (as measured by the MPFR All Fund Performance Index) to its 4.69m members, a total dollar equivalent gain of $43.9bn ($9,400 per member) which translates to a year-to-date accumulated investment gain of $13.1bn, or approximately $2,800 per member. After factoring in contributions, MPF total assets ended November at approximately $1.11tr or an average of $236,800 for each member, the highest level since August 2023.

Quotes:

November’s strong market rebound takes MPF back to positive year-to-date returns

“November’s strong market rebound follows three consecutive months of negative results and brings relief to MPF members as the system returns to positive year-to-date return territory with only one month to go in 2023.”

DIS produces its best monthly 2023 return as Hong Kong & China equity investors miss out

“While US equities was the key driver of MPF’s strong November result, Hong Kong and China equities failed to rally, taking the year-to-date return divergence between the two asset classes to 31.28%, the 2nd highest difference on record. Positively, with relatively higher exposure to US equities than traditional balanced funds, Default Investment Strategy (DIS) fund investors saw their best monthly result this year.”

MPF Ratings exercises its independent voice to stress the importance of DIS as a long term MPF investment savings vehicle

“Not only did DIS investors benefit from November’s market rebound but over the longer term its well diversified low fee portfolio has consistently delivered superior risk adjusted performance results. MPF Ratings reinforces the importance of long term and diversified investing. For the vast majority of MPF members DIS is the ideal vehicle to help them meet their long term retirement needs.”

Table 1: MPF Ratings’ MPFR Index returns by asset class (as at 30th November 2023)