16th October 2024
Leading MPF commentator expresses disappointment as September quarter data suggests members have not learned from the past
MPF Ratings’ Q3 2024 MPF Asset Class Fund Flows Summary has now been uploaded.
Key points are as follows:
- Q3 2024 saw MPF attract estimated net inflows of $11.51bn (See Table 1), 11.1% lower than MPF’s 5 year quarterly average of $12.95bn and 3.8% lower than its 5 year Q3 average of $11.96bn. Net inflow estimate year-to-date is $37.16bn, 5.8% lower than MPF’s 5 year historical year-to-date average of $39.45bn.
- MPF Conservative Funds attracted its highest share of net inflows in over 5 years (63.6%) in Q3, followed by Global Bonds (40.0%) as MPF members capitulated, selling off US and Japanese equities following major market corrections in August.
- US Equities recorded its first quarterly net outflows in 5 years in Q3 driven by a net outflow of approximately -$1.83bn in August.
- HK and China equities saw a net outflow of -$5.11bn in Q3, equivalent to roughly a -44.4% share of net inflows. The asset class has now recorded the highest net outflow level among all fund categories every quarter this year.
- Positively, MPFA mandated DIS funds continue to attract significant support, with DIS’ Core Accumulation Fund, and Age 65 Plus Fund ranking 3rd and 5th in net inflows during Q3.
- Total end September MPF assets and average MPF account balances for MPF’s 4.75m members are a record $1.327tr and $279,100 respectively.
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 Q3 2024 MPF Asset Class Fund Flow Summary by expressing disappointment that MPF members appear to have not learned from past mistakes resulting in some members making a “double loss”. Rather than capitalizing on discounted markets and focusing on long term diversification, MPF Ratings’ Q3 MPF fund flow data suggests that as the US Nasdaq fell into correction territory and the Nikkei 225 Index recorded its largest points drop ever back in early August, members switched into Money Market Funds, and by doing so simultaneously realized significant losses while missing the subsequent market rebound.
MPF inflow data highlights members have not learned from the past
“MPF attracted an estimated $11.51bn in net inflows in the third quarter but the big stories revealed by the data were the investment decisions made by MPF members. Disappointingly members have not learned from the past.”
“Suffering a double loss”
“August saw MPF members react to the US Nasdaq Index entering correction territory and Japan’s Nikkei 225 Index recording its largest ever daily decline by switching from those markets into Money Market Funds at a rate not seen in over five years. Today, US shares are back at record levels and the Nikkei has rebounded around 25%. Members who panicked suffered a double loss, crystalizing the share market fall while missing the strong market rebound.”
Latest fund flow data emphasizes DIS’ benefits and strengths
“Getting ‘market timing’ wrong is a costly and regrettable. Positively, the things MPF’s latest fund flow data reinforces are the benefits and strengths of the MPFA’s Default Investment Strategy (DIS) Funds. It has low fees, is well diversified, and by offering automatic risk reduction it takes the stress away from market timing decisions. It is THE ideal fund option for most MPF members.”
Table 1: 2024 Q3 and Year-to-Date MPF Asset Class Net Inflows
Source: MPF Ratings
Table 2: 2024 Q3 and Year-to-Date 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: 2024 Q3 Top 10 Highest MPF Constituent Fund Net Inflow Winners
Source: MPF Ratings
Table 4: 2024 Year-to-Date Top 10 Highest MPF Constituent Fund Net Inflow Winners
Source: MPF Ratings
