Hong Kong’s Mandatory Provident Fund (MPF) may see returns from its investments grow 11.56% from January through August, the best eight-month performance since 2017, driven by investments in Chinese and Hong Kong equities, according to MPF Ratings, a local consulting firm.
Total asset value of the MPF will likely hit a record HK$1.47 trillion (US$188.4 billion) by the end of August, equating to HK$306,749 per member, the firm says in a statement on August 25.
It pegs the MPF’s total investment gain for the year at HK$151 billion, including HK$18.8 billion in August, and estimates that its Hong Kong and China equities investments grew 25.94% in the first eight months of the year.
Investors, especially from China, have flocked to the Hong Kong stock market this year, attracted by low valuations. As of August 22, the benchmark Hang Seng Index had jumped more than 28%.
MPF members, armed with strong balances in their accounts, may push providers for new cost-effective investment and retirement products, according to Francis Chung, chairman of MPF Ratings.
“With record MPF account balances, it’s our expectation that [MPF] schemes will respond with new investment funds to differentiate themselves from competitors,” he says. “Index tracking collective investment schemes, with their low costs, liquidity and diversification characteristics, will play a critical role in this product development.”
