MPF Laggards Recover in January

Mandatory Provident Funds that track the Hong Kong Hang Seng Index topped the chart of 475 products available to the city’s workers, with a return ranging between 1.6% and 1.9% in January. The asset class recovered slightly after a difficult year in 2021. Hong Kong equity (both active and passive funds) dipped 14.15% on average to rank as the worst-performing Morningstar Category.

The list of the bottom 10 funds is dominated by many of the portfolios that receive a 5-star Morningstar Rating. Manulife GS MPF Euro Eq, Mass MPF US Equity, three share classes of the Allianz Oriental Pacific Fund, and Haitong’s Global Diversification were among the top performers over the three-year period.

All MPF categories, except China bond which recorded a 0.13% single-month gain, posted a loss in January. Other less risky asset classes in the Hong Kong dollar and other money markets showed more resiliency, giving a flat return.

Four of the best-performing categories in 2021 experienced a retreat in January. Wild swings in the US equity market came against a backdrop of a significant shifting landscape for Federal Reserve policy and interest rates. On average, US and global equity MPFs lost 5.97% and 5.68%, respectively. The European equities started strong in the new year but things quickly turned south as vaccine supply shortages, low vaccination rates, and a continued rise in new coronavirus cases weighed heavily on the region’s major markets. Europe equity funds fell 4.86%.

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