Hong Kong’s Mandatory Provident Fund can now invest in active exchange-traded funds.
The Mandatory Provident Fund Schemes Authority (MPFA) has designated active ETFs as a permissible asset class in the retirement scheme, joining other asset classes such as private equity funds and unlisted mutual funds. This means the asset class is limited to a maximum 10% of the MPF’s total investments.
According to the MPFA, the move is in response to “the rapid growth of Hong Kong’s active ETF market in recent years, covering various asset classes and sectors, such as money markets and the technology sector”.
“Active ETFs are similar to unlisted mutual funds investing in the same underlying assets, but offer additional benefits such as risk diversification, increased transparency and liquidity, and providing additional protection for scheme members,” the industry regulator says in a statement on March 10.
Figures from the Hong Kong Exchange and Clearing show that assets of active ETFs grew 143% to HK$23.7 billion (US$3.03 billion) over the 12 months to September 2025.
An MPFA spokesperson downplays the potential risk of the move to include active ETFs in the MPF, particularly for members who have limited financial literacy.
She explains that it means MPF funds can choose to invest in active ETFs, and not that scheme members can directly invest in the funds.
“To manage investment risks and ensure the proper protection of the interests of scheme members, investment in active ETFs for an MPF fund will initially be limited to 10% of the fund’s net asset value,” she tells Asia Asset Management.
The MPFA “will continue to monitor developments in active ETFs and conduct reviews as appropriate to safeguard and further scheme members’ interests”, she says.
The MPF had around HK$1.53 trillion of assets as of end-2025.
