5th March 2024
Total MPF assets up to $1.16tr as average MPF account balances reach highest level since January 2022
MPF Ratings’ February MPF Performance Survey has now been uploaded.
Key points are as follows:
- Led by strong Hong Kong and China equity performance, the MPF system generated a February gain of 3.08% (as measured by the MPFR All Fund Performance Index). Year-to-date return is 0.95%. (See Table 1)
- In absolute dollar terms, MPF’s February investment gain is equivalent to $34.5bn (or $7,400 per MPF’s 4.69m members), taking year-to-date investment gain to $11.0bn (or $2,300 per member).
- After contributions, total MPF assets end February at approximately $1.16tr (up $38.5bn for the month and $19.5bn for year-to-date). Average MPF account balance is estimated to be$247,200 (up $8,200 for the month and $4,200 for year-to-date), the highest level since January 2022.
- All equity and mixed asset fund categories reported an investment gain in February. Hong Kong and China Equity Funds produced February’s best performance, reporting a 1-month return of 6.82%, its best 1-month performance since January 2023. Global Bond Funds, on the other hand, was the worst performing asset class in February reporting a 1-month loss of -1.25%. (Also see Table 1)
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’ February MPF performance survey by highlighting the strong Hong Kong and China equity performance in February.
Quotes:
“MPF saw a number of milestones in February. Local equities had their best month since January 2023, all equity categories produced positive returns (while the last time was in November 2023), and average account balances are at their highest level since January 2022. MPF members will be happy with returns in the first month of the Year of the Dragon.”
What drove the strong MPF equity returns in February?
“Having fallen to multi-year lows, local equities are beginning to offer value to investors. Recent relaxation of Hong Kong property and lending rules and ongoing positive signals from the US point gives the market momentum, and with over 42% of MPF money invested in equity funds, positive share market returns will be the catalyst to take average account balances above the important $250,000 mark.”
Strong HK and China February performance highlights the importance of diversification
“Local equity was the best MPF asset class in February, producing a 6.82% return but one should not forget that in January Hong Kong and China equities were down -9.21%. That is a 16.03% performance difference and highlights how volatile markets can be. It is crucial for MPF members to understand that minimizing portfolio volatility is as important as market returns and the key to minimizing volatility is portfolio diversification. For this purpose, MPF Ratings encourages MPF members to take advantage of the MPFA’s mandated DIS funds. They’re low cost, well diversified and have consistently delivered good returns at very reasonable fee levels.”
Table 1: MPF Ratings’ MPFR Index returns by asset class (as at 29th February 2024)
Source: MPF Ratings
Table 2: 10 best performing MPF constituent funds for the month of February 2024
Source: MPF Ratings
Table 3: 10 best performing MPF constituent funds for year-to-date of 2024
Source: MPF Ratings
Table 4: 10 worst performing MPF constituent funds for the month of February 2024
Source: MPF Ratings
Table 5: 10 worst performing MPF constituent funds for year-to-date of 2024
Source: MPF Ratings
