“No one ever made money buying high and selling low” as ‘Trump slump’ tarnishes a solid MPF quarter

3rd April 2025

March reversals fail to take the shine off MPFA’s strong financial year investment result

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

Key points are as follows:

Despite recording a March monthly loss of -1.34%, Q1 2025 saw the MPF system achieve a return of 2.69% (as measured by MPF Ratings’ MPFR All Fund Performance Index), the 7th best quarterly start since MPF’s inception in December 2020. (See Table 1)
Q1 coincides with MPFA’s end of financial year. MPF Ratings estimates an MPF financial year return of 9.06% (as measured by MPF Ratings’ MPFR All Fund Performance Index). The best financial year return since 2020/21.
In absolute dollar terms, March’s investment loss was approximately -$18.1bn (or -$3,800 per MPF’s 4.79m members) but Q1 saw an investment gain of $34.8bn (or $7,300 per member), while the investment gain over the period of MPFA’s financial year was $108.7bn (or $22,800 per member).
At an asset class level, Hong Kong and China equities lead the way in Q1, posting a return of 11.95%, its 2nd best Q1 return since MPF’s launch, while US equities recorded its 6th worst quarterly start. The differential resulting from an 11.95% gain and a -5.27% loss is 17.22%, the widest Q1 differential in favour of local equities since the inception of MPF. (Also see Table 1)
After factoring in contributions, total MPF assets end March at approximately $1.338tr (down $14.1bn from end of February but up $47.0bn for year-to-date and $155.1bn for rolling 1 year), the 2nd highest level since MPF’s launch, and equivalent to an average MPF account balance of $279,100 (down $2,900 from end of February but up $9,800 for year-to-date and $30,300 for rolling 1 year).

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’ March Investment Performance Summary by urging members remain invested and diversified as he revealed the MPF industry’s latest results and its impact on members.

Q1 2025 saw the MPF system achieve a return of 2.69% to record its 7th best quarterly start ever, contributing to a 9.06% result (and a best result in 4 years) over the MPFA’s financial year. Notably, Hong Kong and China equities led all asset classes in Q1 while US equities slumped to lead MPF’s losses. Such was the difference between local equity gains and US equity losses, it resulted in a variance of 17.22%, the widest ever Q1 difference favouring Hong Kong and China equities in MPF’s 25-year history.

Quotes:

MPFA’s 2024/25 annual result

“The MPFA today announced their provisional end of financial year investment results which MPF Ratings estimates added $108bn (or $22,800 per MPF’s 4.79m members) to members’ total earnings. A strong result that’s MPF’s best financial year return since 2020/21, a result helped by Hong Kong and China equities which is up almost 12% year-to-date, its 2nd best Q1 return since MPF’s inception.”

Despite March losses, MPF produces a solid Q1 2025 result that highlights the importance of Hong Kong and China equities

“After a 11.95% return in the first quarter of 2025, MPF’s Hong Kong and China equity segment is now up almost 30% over the past 15 months. With nearly 19% market share, Hong Kong and China equities is MPF’s largest asset class, so a strong rebound benefits a significant number of MPF members.”

“No one ever made money buying high and selling low”

“Hong Kong and China equities has started the year by outperforming US equities by over 17%, the widest Q1 quarterly performance divergence in MPF’s almost 25-year history. This performance difference should serve as a harsh lesson for the record number of MPF members who switched out of Hong Kong and China equities and into US equities last year. No one has ever made money buying high and selling low. Diversification minimizes uncertainty and that the MPFA’s mandated DIS funds, with its broad asset class investments and automatic de-risking mechanism, are ideal to minimize market uncertainty.”

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