Hong Kong’s Mandatory Provident Fund assets rebounded over the last two months to cross the trillion-dollar mark again as markets improved, according to the Mandatory Provident Fund Schemes Authority (MPFA).
The 413 funds under Hong Kong’s largest public retirement scheme had HK$1.04 trillion (US$133.3 billion) of combined assets at the end of November, up 8.3% from the end of September.
Assets had dropped 9.4% to HK$960 billion in the third quarter as markets were roiled by soaring US inflation and global geopolitical tensions.
In a statement on December 15, a spokesperson for the MPFA, which supervises the industry, says assets rebounded on the back of “the improving performance of investment markets” and that the MPF system recorded an investment return of 7% from end-September to the end of November. The annualised net rate of return since the retirement scheme was created in 2000 was 2.3%.
Hong Kong’s benchmark Hang Seng Index, which plunged 27% in the first nine months of the year, rebounded almost 8% from October through November.
The MPFA spokesperson, who was not named, urged MPF members not to time the market. “Long-term investment will help average out the costs of fund units, thus mitigating the impact of short-term market volatility on investment.”
The statement notes that as of September, around HK$76.8 billion or 8% of MPF assets were invested in the two default investment strategy funds. Contributions from MPF members who do not provide investment instructions are automatically channeled into these funds.
The MPF has more than 4.5 million members.
