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Asset Management / Wealth Management
MPF reports best annual result since 2020
Pension fund members earn HK$102.4 billion as HK and China equities end three-year losing streak
The Asset   6 Jan 2025

The Mandatory Provident Fund ( MPF ), Hong Kong’s compulsory pension scheme, recorded an 8.82% return last year, its best annual result since 2020, delivering earnings of HK$102.4 billion ( US$13.16 billion ) or an average of HK$21,500 for each of its 4.75 million members.

After factoring in contributions, MPF’s total asset size is estimated at HK$1.29 trillion, the fourth highest level since MPF’s launch. That’s equivalent to HK$271,500 per member, up by HK$31,600 from the previous year, according to independent research provider MPF Ratings.

Francis Chung, chairman of MPF Ratings, says it’s no coincidence that the fund produced its best annual result since 2020 as Hong Kong and China equities ended its three-year losing streak.

“With over 17% market share, Hong Kong and China equities are MPF’s largest and most important asset class. When the local equity markets do well, MPF also does well,” Chung says.

Also, during the year, US equities recorded its second straight annual gain exceeding 20%.

Looking ahead, Chung notes: “While local equities are MPF’s most important asset class, immediate focus now turns to President-elect Donald Trump’s inauguration. 2025 threatens to be about protectionism and deregulation and while this rhetoric has proved popular for US equities, a US bias in MPF portfolios could come with consequences.

“Diversification minimizes uncertainty and the MPF Schemes Authority’s mandated DIS ( default investment strategy ) funds continue to be MPF Ratings’ preferred investment option for MPF’s 4.75 million members.”

The fund’s monthly loss of -0.81% in December, based on MPF Ratings’ MPFR All Fund Performance Index, is but a small blip in a year of solid performance for the MPF system, he adds.