Watershed result sees DIS break MPF inflow records

19th January 2024

Bold acquisition sees surprise MPF sponsor top inflow table

MPF Ratings’ 2023 MPF Asset Class Fund Flows Summary has now been uploaded.

Key points are as follows:

2023 Q4 quarterly MPF net inflows totalled $12.73bn to take MPF’s full year 2023 result to $52.19bn, a -7.1% decline from 2022’s record $56.15bn. (See Table 1)
At a sponsor level, BCT’s bold ‘statement of intent’ acquisition of Invesco’s Strategic MPF Scheme saw it top the sponsors’ annual net inflow table while traditional heavy weights Manulife and Sun Life occupied 2nd and 3rd respectively. (See Table 2)
At the asset class category level, DIS (with an estimated combined annual net inflow share of 30.1%) wasthe most popular fund category. The MPFA’s mandated low fee, diversified fund option topping $15bn and attracting more than 30% of annual net inflows for the first time since its April 2017 introduction. (Also see Table 1)
US equity funds dominated inflows at the fund level. 4 of the top 10 most popular funds had a US equity theme with Manulife’s MPF North American Equity Fund the most popular. (See Table 4)
MPF returned an estimated 3.51% in 2023 and ended 2023 with total assets of approximately $1.14tr (up $89.5bn for the year), equivalent to an average MPF account balance of $243,000 (up $19,100 over the year).

Francis Chung (叢川普), Chairman of MPF Ratings Ltd, Hong Kong’s independent Mandatory Provident Fund (MPF) research specialist today released his organization’s 2023 full year MPF Asset Class Fund Flows Summary by declaring a watershed moment for Hong Kong’s MPF system. Never since its April 2017 launch has DIS received annual inflows greater than $15bn or attracted more than 30% of total annual MPF net inflows – until now. The MPFA’s mandated low fee, diversified fund option attracted an estimated $15.71bn or 30.1% of MPF’s 2023 net inflows, strong evidence members are heeding MPFA guidance to diversify and invest for the long term.

At an MPF scheme sponsor level, BCT’s November ‘statement of intent’ acquisition of the Invesco Strategic MPF Scheme ensured it ended 2023 ranked first on a net inflow basis, surprising traditional scheme sponsor heavyweights, Manulife and Sun Life who fell to 2nd and 3rd respectively from a year ago.

While DIS may have topped the asset class category level, at the fund level US equities themed funds dominated with Manulife’s MPF North American Equity Fund proving to be the most popular, attracting an estimated $3.94bn in net inflows.

Quotes:

What does DIS achieving 2023’s highest fund flow reveal?

“The MPF system generated an estimated return of 3.51% in 2023. Historically, when MPF produces a positive return equity funds usually attract most of MPF’s inflows. Until 2023 DIS had never attracted more than $15bn or 30% of MPF net inflows in a calendar year. This unprecedented result demonstrates members are heeding MPFA guidance to focus saving for retirement strategies on long term investing and diversification.”

A surprising sponsor topped the MPF scheme sponsor net inflow league table.

“BCT topped the scheme sponsors’ annual net inflow league table. This is a surprise as it’s a category usually dominated by sponsors with native distribution such as Manulife and Sun Life. BCT’s November acquisition of the Invesco Strategic MPF Scheme provided an immediate inflow boost and was a bold ‘statement of intent’ that tells the market that BCT is committed to MPF for the long term.”

Despite DIS’ strong support US equity funds dominated net inflows at a fund level.

“Despite the unprecedented support for DIS, US equity funds, led by Manulife’s MPF North American Equity Fund were the most popular. This is not entirely surprising given the strong US equity market performance. Positively, 3 out of the top 10 net inflow winners were DIS Core Accumulation funds.”

Table 1: MPF Asset Class Net Inflows as at 31 December 2023