Hong Kong’s Mandatory Provident Fund market was dominated in the first quarter by Manulife Provident Funds Trust and Sun Life Financial, which drew a combined 87% of the HK$11.26 billion (US$1.44 billion) of net inflow, according to local investment consultancy MPF Ratings Ltd.
The total inflow, which was down from HK$13.45 billion in the first quarter of 2020, increased the assets of Hong Kong’s largest public retirement scheme to HK$1.17 trillion as of March 2021 from HK$1.14 trillion at the end of 2020, MPF Ratings says in a report on April 17.
Manulife – which recently dethroned HSBC as the largest MPF provider – and Sun Life were the only ones with double-digit shares of inflow in the three months to March 31. Six firms, including HSBC, registered net outflows.
“A combined 87% share of net MPF fund flows for Sun Life and Manulife reflects a duopoly developing within MPF, a dominance which can only be broken by other MPF providers offering better value and services,” MPF Ratings Chairman Francis Chung says in the report.
He believes the two companies may dominate the market even more if rival providers fail to improve their offerings.
Manulife attracted HK$5.19 billion of net inflow, or 46.1% of the total, and Sun Life was second with HK$4.57 billion or 40.6%. Third-placed AIA was far behind with HK$524 million, or 4.7%.
HSBC and its subsidiary Hang Seng Bank reported net outflows of HK$585 million and HK$170 million, respectively.
Overall, China/Hong Kong equities and Asian equities funds attracted 88.9% of net inflows. According to the report, there was “a marked fund switching within the MPF space as MPF members have high confidence on local and regional equities”.
Money market funds, bond funds and guaranteed funds all recorded outflows.