MPF records a surprising fall in net inflows in June quarter

17th July 2024

Unexpected flow decline contradicts MPF’s all time record asset levels

MPF Ratings’ Q1 2024 MPF Asset Class Fund Flows Summary has now been uploaded.

Key points are as follows:

  • MPF saw a surprising drop in estimated net inflows in the June quarter.  Estimated Q2 net inflows are $11.77bn (See Table 1), approximately 10% below MPF’s 5 year historical quarterly average of $13.11bn and 13% lower than the historical 5 year Q2 average of $13.54bn. The decline contributed to a first half 2024 net inflow estimate of $25.65bn, 7% below the 5 year historical first half average.
  • US Equities continues to attract the highest net inflows at the expense of Hong Kong and China equities. With a net inflow share of 43.2%in Q2, US equities attracted MPF’s largest share of net inflows for the 2nd consecutive quarter while Hong Kong and China equities saw (the largest) net outflows again despite being MPF’s largest asset class.
  • Positively, MPFA mandated DIS funds continue to attract significant support. DIS’ Core Accumulation Fund ranking 2nd in net inflows on a quarterly and half yearly basis.
  • At a sponsor level, Manulife was Q2’s market share and net inflow winner, ranking 1st with a market share of 27.9% and net inflow share of over 35% (See Table 2). Its MPF North American Equity Fund topped the fund net inflow table and is estimated to have attracted over 13% of the industry’s net inflows for both Q2 and first half of 2024 (See Tables 3 and 4).
  • MPF returned an estimated 2.62% in Q2 and 5.15% for first half of 2024, ending June with MPF’s all-time record total asset level at approximately $1.226tr (up $42.9bn for the quarter and $85.3bn for the first half of 2024), equivalent to an average MPF account balance of $257,900 (up $9,000 for the quarter and $17,900 for the first half of 2024).

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 Q2 2024 MPF Asset Class Fund Flow Summary by highlighting a conflicting trend that saw MPF total assets achieve a record high while recording a surprising drop in net inflows in the 2nd quarter of 2024. Q2 2024 net inflows are estimated to be $11.77bn which is approximately 10% lower than MPF’s historical 5 year quarterly average and 13% lower than corresponding Q2 numbers for the past 5 years. 

Quotes:

Record total MPF assets despite large net inflow falls

“Despite June quarter inflows being 13% lower than the historical 5 year Q2 average, the MPF system holds a record $1.226tr in member assets. While the weak June quarter MPF net inflow result is a surprise, the system is benefitting from its strongest first half year investment returns since 2019.” 

Why has the MPF system seen a sharp drop in net inflows?

“MPF net inflows mirror the employment landscape however factors such as reduced voluntary contributions, permanent departures and early retirement can also skew short term net inflow data. It’s difficult to pinpoint the exact factor but one cannot rule out any reason for the sharp and unexpected short term drop.”

Timing and magnitude of the current inflows into US equities raisesSignificance of the ongoing support for US equities at the expense of Hong Kong and China shares  concerns

“US equities has ranked 1st in net inflows throughout this year while Hong Kong and China equities has ranked last. Members make their own choices and MPF Ratings remains concerned that some MPF members appear to still be picking and choosing markets rather than diversifying. On a positive note the MPFA’s mandated low cost, well diversified DIS funds continue to see strong support so some members are heeding the diversification message.”

MPF Ratings reiterates its preferred 2024 investment approach

“Concentrated investments in single markets or asset classes increase risks in portfolios. MPF Ratings continues to emphasise diversification and long term wealth creation. It is for this reason the MPFA’s mandated low fee and well diversified DIS funds continue to be MPF Ratings’ preferred investment products.”

Table 1:  Q2 And First Half 2024 MPF Asset Class Net Inflows

Source: MPF Ratings

Table 2:  Q1 2024 MPF Scheme Sponsor Net Inflows

Source: MPF Ratings

^ Orientiert Group, the scheme sponsor of AMTD MPF Scheme, has been renamed as oOo Group

Table 3: Q2 2024 Top 10 Highest MPF Constituent Fund Net Inflow Winners

Source: MPF Ratings

Table 4: First Half 2024 Top 10 Highest MPF Constituent Fund Net Inflow Winners

Source: MPF Ratings

Scroll to Top
Processing...
Thank you! Your subscription has been confirmed. You'll hear from us soon.
Subscribe to the MPF Ratings newsletter
ErrorHere