MPF’s first quarter inflows fall below its 5-year historical average

16th April 2025

MPF’s top sponsors see similar flow patterns as markets remain uncertain

MPF Ratings’ Q1 2025 MPF Asset Class Fund Flows Summary has now been uploaded.

Key points are as follows:

Q1 2025 saw MPF attract estimated net inflows of $11.9bn (See Table 1), the lowest Q1 net inflows since 2021 and 13.8% lower than MPF’s 5-year historical Q1 average of $13.8bn.
MPF Conservative Fund attracted MPF’s greatest share of Q1 2025 net inflows, attracting 84.7% (Also see Table 1), its highest quarterly net inflow share since at least 2019.
From being MPF’s most popular fund category for 2 straight years and attracting over 50% of MPF’s annual net inflows in 2024, US Equities saw an estimated -$3.65bn net outflows (-30.6% share of industry’s net inflows) in Q1 2025 (Also see Table 1), its largest quarterly net outflows over 6 years.
Despite producing a 11.95% quarterly return, Hong Kong and China equities saw net outflows for the 5th consecutive quarter. (Also see Table 1)
In an unusual coincidence, MPF’s top 6 scheme sponsors (Manulife, HSBC, Sun Life, AIA, BOCI-Prudential and BCT) all attracted a greater net inflow share than their respective total market asset share in Q1. (See Table 2)
At the end of March, the MPF system achieved a Q1 return of 2.69% with total assets of approximately$1.338tr, the 2nd highest level since MPF’s launch, and average MPF account balances of $279,100 for 4.79m MPF members.

Francis Chung (叢川普), Chairman of MPF Ratings Ltd, Hong Kong’s independent Mandatory Provident Fund (MPF) research specialist today released the organization’s highly anticipated Q1 2025 MPF Asset Class Fund Flow Summary by pointing out that MPF’s Q1 net inflows were its lowest Q1 level since 2021 and 13.8% lower than the system’s 5-year historical Q1 average. Mr Chung believes that caution arising from extreme market uncertainties is largely to blame as evidenced by record net inflows into MPF’s Conservative Fund segment at the expense of both US equities and Hong Kong and China equities despite the strong performance of local equities in the first quarter.

Quotes:

Why did Q1 2025 experience a historical decline in MPF net inflows?

“Over the past few years individuals have taken advantage of MPF’s cost effectiveness, security and efficiencies and used MPF as a general savings, investing and tax planning platform through the various contribution options afforded by MPF. Given the volatile market conditions, individuals are likely to have thought twice about investing, and those that did invested very conservatively as evidenced by record inflows into the MPF Conservative Fund segment.”

“Safe havens”

“The latest fund flow data suggests in times of uncertainty, MPF members are seeking ‘safe havens’. Money has left equities and gone into money market funds, while the 6 biggest MPF sponsors all attracted a share of net inflows greater than their share of the overall market. It’s as though MPF members feel safer in bigger schemes during times of uncertainty.”

What the net inflow results are telling us about member behaviour

“Record net inflows into MPF’s Conservative Fund segment, substantial outflows from equity assets and the top 6 MPF scheme sponsors all attracting relatively larger shares of net inflows than their respective market shares suggest that MPF members are seeking security during these turbulent times. While understandable, it’s important to reinforce the strength and advantages of the MPF system and to encourage members to diversify and remain invested for the long-term. The MPF system is highly secure and robust. The protection of MPF member money is assured.”

Table 1: 2025 Q1 MPF Asset Class Net Inflows