Top MPF Gainers and Losers in November 2023

Developed Markets Equities Continue to Outperform

Equity products investing in European, U.S., and Japanese equities continued to lead the board. In November, Europe equity MPFs brought investors a 9% gain. U.S. equity MPFs came second for the month with an 8.9% return. Global equity funds also averaged an 8.4% return and Japan equity funds ranked fifth, giving out a 6.9% increase.

All of the four categories have accumulated double-digit returns for the first 11 months of the year. U.S. equity is the top category as its average return amounts to 20.6%. It’s followed by the new investor darling, Japan equity, as the MPF category posted a 20% gain year to date.

The DIS – Core accumulation funds scored a 10.4% gain for the year, after climbing by 6.4% in November. Meanwhile, the less risky option for retirees, DIS – Age 65 plus averaged a 4.25% in November, reversing a flat loss to a 4.16% for the year.

Laggards remain to drag the scheme’s performance. Hong Kong equity MPFs, which make the largest category by the number of funds, returned 0.1% for the month, far from reversing the 13.3% loss the category accumulated so far. Another poor performer for 2023, China & greater China equity MPFs had a relatively better month, delivering a 2.5% gain. The category registered a 9.4% loss for the year.

Bonds Make a Comeback

All bond MPFs registered single-digit positive returns in November, as traders are looking ahead to rate cuts as soon as March 2024.

The CME FedWatch Tool data shows that bond futures markets are pricing in 1.25 percentage points of easing by the end of 2024, or five separate rate cuts of 0.25% each. That would take the fed-funds rate down to a target range of 4.00%-4.25% from its current target range of 5.25%-5.50%.

On the back of this anticipation, while the yield curve remains inverted, the yield on the 10-year Treasury note fell to 4.37% from 4.88% at the end of October. Because of the reverse relationship between bond yield and price, bond funds experienced strong gains over this period.

The best-performing category is global bond funds, which posted a 4.4% gain for the past month. But, in terms of year-to-date performance, HKD bond funds led the board with a 3.6% return. Moreover, this category has been out of favor for the past decade as each of the bond categories gave out a flat return only. 

Korean Stocks Lead

In terms of individual funds, the best performers in November were two share classes of Haitong Korea Fund, which registered a robust gain of 14.6%. Amid fears around global trade slowdown and weaker demand for chip exports, Korea was among the weakest Asian equity markets from August. Subsequently, as the outlook on the Fed interest rates brightened up, Korean equities began to move higher from mid-November. In U.S. dollar terms, Morningstar Korea Index advanced by 11.6% for the month.

The top five list is then completed by Manulife GS MPF Euro Eq, Manulife GS MPF N Amer Eq, and BCT (Industry) Global Equity Fund. Each of the funds was giving out a return above 10%. 

The bottom five funds were either actively managed or index-tracking Hong Kong equity funds. Manulife GS MPF HSI Tracking was the worst performer, moderately dropping by 1.05%. The fund is followed by four other peer funds which lost between 0.73% and 0.39%. To find the bottom-performing fund that isn’t a Hong Kong or China fund, MPF contributors will have to go down to the 30th place, taken by Manulife GS MPF Interest, which gave out a flat return in November.