Despite August volatility, the system produces a 4th consecutive month of positive returns
MPF Ratings’ August MPF Performance Survey has now been uploaded.
Key points are as follows:
- Despite a major intra-month correction, MPF ended August positively. A 1.76% return (as measured by the MPFR All Fund Performance Index) marks a 4th consecutive positive performance month to take year-to-date gains to 7.60%, MPF’s 5th best first 8-month performance since inception. (See Table 1)
- In absolute dollar terms, August’s investment gain is equivalent to $21.8bn (or $4,600 per MPF’s 4.75m members) contributing to a year-to-date investment gain of $88.2bn (or $18,500 per member).
- Factoring in both gains and contributions, MPF total assets ended August at an estimated $1.26tr, an all-time record high. Average MPF account balances per 4.75m members is now $265,700 (up $5,400 from July and $25,700 for year-to-date), the highest level since June 2021 and the 3rd highest ever.
- Uniquely, while all asset classes produced positive performances, “Other equities” (dominated by Manulife’s MPF Healthcare Fund) topped August’s performance table at 5.20% highlighting the diversification benefits of the Healthcare sector in times of high volatility. (See Table 1 & 2)
- Highlighting August’s volatility, Japanese equities, despite recording the Nikkei 225’s largest ever daily points drop on the 5th of August rebounded to remain MPF’s best performing asset class year-to-date (18.91%) while US equities also continues to perform strongly and has now recorded a 17.45% return for 2024, its 3rd best first 8-month performance since MPF’s inception. (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’ August MPF Performance Survey by pointing out that despite August’s extreme intra-month market volatility, which saw the US Nasdaq 100 momentarily fall into “correction” territory and Japan’s Nikkei 225 Index record its largest ever single day points decline, the MPF system ended August 1.76% up, a result which has delivered MPF’s 4.75m members an additional $21.8bn in investment earnings (or an average of $4,600), contributed to a record MPF asset size of $1.26tr, and has taken year-to-date investment gains to $88.2bn (or an average of $18,500) to put MPF on track to deliver $100bn in calendar year earnings for the first time since 2020.
Quotes:
August’s rollercoaster ride gives MPF members who stayed onboard plenty to cheer about
“Despite a rollercoaster ride which saw the US Nasdaq briefly fall into correction territory and Japanese equities record its largest daily points drop, MPF ended August up 1.76% to record a 4th consecutive month of positive returns. Average MPF member account balance is now approximately $265,700, members have received around $18,500 in investment gains this year, and at $1.26tr the MPF system is now at a record size.”
Intra-month equity market volatility teaches MPF members a powerful lesson
“On the 2nd of August, the US Nasdaq market closed more than 10% below its record high recorded one month earlier, and on the 5th of August the Nikkei 225 Index was down over 12% as it suffered its largest points drop ever. Selling would have been an expensive mistake as markets rebounded and MPF produced a 4th consecutive month of positive returns.”
Outlook for 2024 – MPF is on track to achieve $100bn in earnings
“US growth prospects, interest rate discussions and the forthcoming US election may disrupt markets, serving to highlight the importance of diversification. That said, 2024 has been good for the MPF system so far, putting it on track to achieve $100bn in calendar year earnings for the first time since 2020.”
Table 1: MPF Ratings’ MPFR Index returns by asset class (as at 31st August 2024)
Source: MPF Ratings
Table 2: 10 best performing MPF constituent funds for the month of August 2024
Source: MPF Ratings
Table 3: 10 best performing MPF constituent funds for 2024 year-to-date
Source: MPF Ratings
Table 4: 10 worst performing MPF constituent funds for the month of August 2024
Source: MPF Ratings
Table 5: 10 worst performing MPF constituent funds for 2024 year-to-date
Source: MPF Ratings
