Hong Kong’s MPF scores best first half since 2019 as assets hit record of US$157 billion

Total assets grew 7.6 per cent as of the end of June, compared with the end of 2023, surpassing the previous record level of HK$1.221 trillion in June 2021. The sum, which takes into account investment gains and new contributions from members, works out to about HK$258,100 per member.

This “reinforces MPF as a highly robust and highly secure retirement savings and investing system that safeguards member assets operationally”, he said.

Funds investing in US stocks delivered the best returns, posting average growth of 13.6 per cent for the first six months. They were followed by Japanese equity funds, which returned 13.4 per cent and Asia equity funds at 10.7 per cent.

Hong Kong and China equity funds – the most popular fund choice with about a quarter of all assets – ranked 11th at 4.3 per cent.

However, Hong Kong and China equity funds had the best performance in the second quarter, with an average return of 6.9 per cent in the April to June period, compared with 3.5 per cent for US stock funds during that span.

Hong Kong’s benchmark Hang Seng Index rose 7 per cent in the second quarter, outperforming the S&P 500’s 4 per cent increase. This came after the China Securities Regulatory Commission announced in April that it would facilitate Hong Kong listings by leading mainland companies and expand the Stock Connect cross-border investment schemes.

MPF members should take a long-term, diversified approach to their MPF investments, which is why the scheme provides funds that invest in different markets and asset classes, said Cheng Yan-chee, MPFA managing director.

“MPF is a long-term investment spanning over 40 years,” he said in reply to a Post inquiry. “Scheme members should correspondingly adopt a long-term instead of a short-term investment approach in managing MPF, especially during times of market fluctuations.”

Members who lack the time to investigate the various options, or are unfamiliar with managing their MPF investments, may choose the default investment strategy (DIS), which uses a diversified approach to investing in global stocks and bonds and reduces the risk level according to the members’ age, Cheng said.

DIS funds also performed well in the first half. Those with higher exposure to stocks reported a gain of 6 per cent and those more focused on bonds recorded a 0.9 per cent increase, MPF Ratings data showed.

Mixed-asset funds, which invest in equities and bonds, gained 6.2 per cent in the first half, and 2.5 per cent in the second quarter.

Global bond funds and money market funds were the only loss makers in the first half, losing 3.1 per cent and 0.2 per cent, respectively.

“MPF performance for the first six months of the year was encouraging,” said Kenrick Chung, director of Ben. Excellence Consultancy, a Hong Kong insurance broker. “It was contributed to by the positive performance of equity markets, especially in Hong Kong and the US.”

In the second half of the year, global markets will be affected by election results in various countries, especially the US, as well as interest rate decisions by the US Federal Reserve.

“In view of the sophisticated situation, MPF members with high-risk tolerance can consider balanced funds with different allocations on stocks and bonds,” he said.

Established in 2000, Hong Kong’s MPF gathers monthly contributions from employers and employees, which is invested into the member’s choice of 379 investment funds. Employees can cash in their investments at the age of 65.