MPF earns $28.5bn in 8th best quarterly start

8th April 2024

System on track to generate $100bn in 2024

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

Key points are as follows:

MPF returned 2.47% in Q1 2024 with a March 1.51% monthly return accounting for over half the quarterly return (as measured by MPF Ratings’ MPFR All Fund Performance Index). (See Table 1)
Q1 coincides with MPFA’s end of financial year. MPF Ratings estimates an MPF financial year return of 1.93%. The first positive financial year return since 2020/21.
In absolute dollar terms, MPF Ratings estimates MPF’s March investment gain to be equivalent to $17.5bn (or $3,700 per MPF’s 4.75m members), Q1 investment gain to be $28.5bn (or $6,000 per member) and rolling 1 year investment gains to be $23.2bn (or $4,800 per member).
After contributions, total MPF assets end March at approximately $1.18tr (up $21.5bn for the month, $41.7bn for the quarter and $73.3bn for rolling 1 year). Average MPF account balance is estimated to be $248,700 (up $4,500 for the month, $8,800 for the quarter and $12,400 for rolling 1 year), the highest level since January 2022.
Japan equities produced Q1 and 1 rolling year’s best performance, reporting a quarterly return of 12.30% and a 1 year return of 30.48%. US equities, MPF’s largest net inflow share recipient in 2023 delivered the 2nd best performance in Q1 and over 1 rolling year (9.82% and 28.39% respectively). Hong Kong and China equity funds was the worst performing asset class in Q1 and over 1 rolling year, reporting a quarterly loss of -2.40%. and a 1 year rolling loss of -18.01%. (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’ March MPF performance survey by highlighting that MPF’s 2.47% Q1 2024 return would be MPF’s 8th best ever quarterly start, contribute to a first positive financial year MPF return in 3 years, and add an extra $28.5bn of investment gains into MPF member accounts (representing a gain of about $6,000 per MPF’s 4.75m members). After factoring in contributions, MPF total assets would end Q1 at $1.18tr, equivalent to an average account balance of $248,700.

Quotes:

A very solid quarterly result puts the MPF system on track to deliver $100bn in 2024

“$28.5bn of investment gains was added to MPF accounts in the first quarter. That’s the equivalent of $6,000 for every MPF member and takes the average MPF account balance to almost $250,000. That’s a very solid result and gives the MPF system a chance to deliver an additional $100bn in 2024.”

Outlook for 2024

“Global inflation and interest rates will determine 2024’s direction but with most MPF money invested in Hong Kong and China equities, local market performance will still be key. While it’s tempting to chase strong returns seen in markets such as Japan and the US, market volatility resulting from conflicting economic indicators reinforces the importance of diversified investing. The use of DIS funds continues to be MPF Ratings’ preferred 2024 investment approach.”

Table 1: MPF Ratings’ MPFR Index returns by asset class (as at 31st March 2024)