Average MPF balances to crack $270,000 while other records are set to follow
Key points are as follows:
- Lower US interest rates and new Mainland economic measures place the MPF system on track to record a 7th positive monthly return. MPF Ratings’ MPFR All Fund Performance Index (as at 23rd of September) is showing an estimated 0.50% return, contributing to a quarter-to-date gain of 2.83% and a year-to-date gain of 8.14%. (See Table 1)
- In absolute dollar terms, September’s current month-to-date investment gain is equivalent to roughly $19.9bn (or $4,200 per MPF’s 4.75m members) contributing to a quarter-to-date gain of $48.5bn (or $10,200 per member) and year-to-date gain of $108.1bn (or $22,700 per member).
- HK & China equities is September’s best performing MPF fund category, while Global Bonds have rallied over the quarter. On a year-to-date basis, US, Japanese and Global equities are topping a performance table that sees all fund categories post positive returns for the year. (Also see Table 1)
- Factoring in contributions, total MPF assets are currently on track to end September at an estimated $1.286tr (up $23.9bn from end of August, $60.4bn from Q2 and $145.6bn for year-to-date), equivalent to an average MPF account balance of $270,600 for MPF’s 4.75m members (up $5,000 from end of August, $12,700 for quarter-to-date and $30,600 for year-to-date).
- A total asset size of $1.286tr and an average member account balance of $270,600 would be all-time record highs with the average member account balance surpassing the previous high of $268,900, achieved in June 2021.
Francis Chung (叢川普), Chairman of MPF Ratings Ltd, Hong Kong’s independent provider of MPF research, views and education announced that on the back of lower US interest rates and new Mainland economic measures MPF is set to deliver good news to its 4.75m members in September by recording both an all-time record total asset and average account balance sizes.
According to Mr Chung, MPF is on track to end September up approximately 0.50%, which if achieved would translate to a 3rd quarter return of approximately 2.83% and a year-to-date return of 8.14%. More importantly, after factoring contributions, a record total MPF asset size of $1.286tr and an average account balance of $270,600 will be achieved – the first time MPF’s average account balance breach the $270,000 threshold.
Quotes:
All-time record average MPF member account balances is a big reward for MPF’s members
“It is likely that September will see average MPF account balances breach $270,000 for the first time ever. Account balance size is a key MPF success metric as it directly translates to how much money members have for retirement. An average MPF account balance greater than $270,000 is a highly significant sum of money for most Hong Kong workers and due reward for MPF’s 4.75m members.”
Timely stimuli turn markets on
“September has seen both the US Fed reduce interest rates and the Mainland announce new economic measures. Both are positive catalyst for markets that are contributing to a likely 7th positive month of MPF positive returns out of 9 in 2024.”
Outlook for 2024 – MPF is on track to achieve in excess $100bn in earnings
“All MPF asset classes are recording positive 2024 year-to-date gains. With expectations of further US interest rate reductions, the Mainland is serious about stimulating economic growth, momentum favours the MPF system to achieve calendar year earnings in excess of $100bn.”
Table 1: MPF Ratings’ MPFR Index returns by asset class (as at 23rd September 2024)
Source: MPF Ratings
