A positive January is historically good news for MPF but……

5th February 2025

2025 will be no ordinary year

MPF Ratings’ January MPF Performance Survey has now been uploaded.

Key points are as follows:

  • The MPF system starts 2025 positively with a January investment gain of 1.61% (as measured by the MPFR All Fund Performance Index). (See Table 1)
  • History suggests MPF members can be cautiously optimistic that 2025 will be a good year. On the 13 previous occasions MPF produced a positive January result, 8 resulted in a positive 12 month average return of around 12%.
  • In absolute dollar terms, January’s investment gain is approximately $20.8bn (or $4,400 per MPF’s 4.75m members).
  • Putting aside “Other” equities, non-Asian equity asset classes have led January’s positive start, with US equities carrying its strong 2024 performance into the new year, and European equities outperforming all regions. (Also see Table 1)
  • After factoring in contributions, total MPF assets end January at approximately $1.315tr (up $24.3bn from end of December), the 2nd highest level since MPF’s launch, and equivalent to an average MPF account balance of $276,700 (up $5,100 from end of December).

Francis Chung (叢川普), Chairman of MPF Ratings Ltd, Hong Kong’s independent provider of MPF research, views and education today pointed out that while history suggests that MPF system’s positive January start points to a strong calendar year, 2025 will be no ordinary year.

Based on MPF Ratings’ MPFR All Fund Performance Index, the MPF system produced an investment gain of 1.61%. the equivalent of approximately $20.8bn and represents a gain of about $4,400 per MPF’s 4.75m members. Since MPF’s launch, a positive January has been recorded 13 times, and 8 of those then resulted in a positive full year average return of 12%.

Quotes:

History points to a strong 2025

“MPF’s history suggests members can be cautiously optimistic that 2025 will be a strong year. Of the 13 previous occasions MPF started January positively, 8 resulted in a positive full year return at an average return of approximately 12%. A 12% return would rank amongst the top 10 best annual MPF results.”

But 2025 will be no ordinary year  

“Driven by consecutive 20%+ annual returns, a result not seen for almost 3 decades, US equities are now expensive. Combine expensive markets with Trump’s confrontational tariff threats means 2025 will be no ordinary year.”

How will tariffs affect MPF members?

“Be prepared for volatile markets. Tariffs are inflationary if they’re passed to consumers through higher prices. Importers can soak up tariffs but that may lead to lower profits and create issues such as unemployment, or countries can counter tariffs with their own measures and that’s universally bad. Bottom line is tariffs will create uncertainty. Diversification minimizes uncertainty and the MPFA’s mandated DIS funds, with its broad asset class investments and automatic de-risking mechanism, are ideal to minimize uncertainty. For this reason it continues to be MPF Ratings’ preferred investment option for MPF’s 4.75m members.”

Table 1: MPF Ratings’ MPFR Index returns by asset class (as at 31st January 2025)

Source: MPF Ratings

Table 2: 10 best performing MPF constituent funds for the month of January 2025

Source: MPF Ratings

Table 3: 10 worst performing MPF constituent funds for the month of January 2025

Source: MPF Ratings

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