4th December 2024
MPF on track for double digit 2024 returns after 8th month of positive returns
MPF Ratings’ November MPF Performance Survey has now been uploaded.
Key points are as follows:
- Trump’s US Presidential Election victory boosted US equities in November but impacted non-US markets, particularly Hong Kong and China equities. Despite this, the MPF system saw a modest 0.14% gain in November, marking its 8th positive month in 2024. Year-to-date gains are 9.72%, putting the system on track to deliver its first double digit annual gain since 2020, and its 9th double digit return since the system’s inception. (See Table 1)
- In absolute dollar terms, November’s estimated investment gain is roughly $1.8bn (or $400 per MPF’s 4.75m members), contributing to a year-to-date gain of $112.9bn (or $23,800 per member).
- Following the US election, US equities led in November with a 6.00% return to take year-to-date return to 25.11%, its best first 11 calendar month performance since 2013 and the 2nd best since MPF’s launch.
- While US markets reacted positively to Trump’s victory, concerns over possible US tariffs and other punitive policy decisions impacted other markets. MPF’s November losses are led by Hong Kong and China equities, Asian equities and European equities. Despite a -4.29% return in November, Hong Kong and China equities remains the 4th best performing asset class year-to-date with a return of 12.90%.
- As a result of November’s modest gain, MPF Ratings expects MPF’s total asset size to rise to $1.296tr, the 2nd highest level since MPF’s launch, up $4.4bn from October and up $155.3bn year-to-date. Average member account balances are expected to increase to $272,600, up $900 from October and up $32,700 year-to-date.
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’ November MPF Performance Survey by noting that MPF’s November performance was directly affected by the US Presidential election result. While US equities rallied, concerns over possible US tariffs and other punitive policy decisions cast a shadow over other markets, in particular Hong Kong and China equities. Despite this uncertainty, MPF members will be pleased to learn that for the 8th month this year, the MPF system has recorded a positive, albeit modest gain, rising 0.14% to take year-to-date gains to 9.72% and putting the system on track to record a double digit return for the 9th time since inception and the first since 2020.
Quotes:
On the ropes but no knock-out blow for local markets
“Post election, Donald Trump was seen ringside at a MMA fight. Trump watching a fight while simultaneously agitating for a fight over global trade is ironic, but unlike the knock-out blows seen at the MMA fight, local markets have been far more resilient. They maybe on the ropes but Hong Kong and China equities remains the 4th best performing asset class year-to-date with a return of 12.90%.”
9.72%. Can we reach 10% for the year?
“With one month remaining, a 9.72% year-to-date return puts the MPF system on track for its first double digit annual return since 2020 and its 9th since the system’s inception. December is historically a good month for equity markets, with two-thirds recording positive returns since MPF’s inception. Based on history the odds are in the system’s favour.”
Outlook – DIS funds’ consistency highlights that ‘staying the course’ and diversification is key to MPF ending 2024 at record levels
“With Trump at the helm markets could be as unpredictable as the President-Elect himself. MPF members must understand that saving and investing for retirement is a long-term journey so ‘stay the course’. The success of such a strategy is evidenced by the MPFA’s mandated Default Investment Strategy (DIS) funds’ consistent performance. A combination of low fees, diversified investing, and an automatic risk reduction mechanism ensures that members focus on their investment goals.”
Table 1: MPF Ratings’ MPFR Index returns by asset class (as at 30th November 2024)
Source: MPF Ratings
Table 2: 10 best performing MPF constituent funds for the month of November 2024
Source: MPF Ratings
Table 3: 10 best performing MPF constituent funds for year-to-date 2024
Source: MPF Ratings
Table 4: 10 worst performing MPF constituent funds for the month of November 2024
Source: MPF Ratings
Table 5: 10 worst performing MPF constituent funds for year-to-date 2024
Source: MPF Ratings
