22 October 2019
Stock market losses had a huge impact on the performance of MPF schemes last year. Photo: CNSA
Stock market losses had a huge impact on the performance of MPF schemes last year. Photo: CNSA

MPF members lost almost HK$22K on average in 2018, index shows

As stock markets sank in the last few months of 2018, members of Mandatory Provident Fund (MPF) schemes also saw the money they were saving for retirement suffer sharp losses.

The Convoy MPF Composite Index, which tracks the performance of MPF funds, stood at 211.15 on Dec. 24, down 4.1 percent from a month ago.

For the whole of 2018, which was calculated from the beginning of last year to Dec. 24, the index dropped 10.6 percent, the Hong Kong Economic Journal reports.

That suggested that MPF scheme members lost an average of HK$21,933 from their pension investments last year, based on their total number of 4.27 million at the end of 2017.

The average loss in December alone was HK$7,869.

The index, compiled by the Fund Research Department of Convoy Asset Management Limited, reflects the movements and trends in the Hong Kong MPF market.

It covers at least 100 of the largest funds offered by the MPF system, covering at least 80 percent of total assets in the market, and its constituent funds and proportions are adjusted every six months, according to information on Convoy’s website.

Funds investing in US stocks were the worst performer in December, with an average drop of 14.2 percent from the previous month. They fell 12.4 percent in 2018.

Japanese stock funds were down 9.45 percent in December, and their annual fall of 18.23 percent was worse than that of any other fund.

Hong Kong and China stock funds were down 4.16 and 5.44 percent respectively for the month, and fell 15.57 percent and 14.49 percent last year.

Declines in US equities in recent months were attributed to various political events, including chaotic negotiations over Britain’s withdrawal from the European Union, unclear prospects of a resolution of the US-China trade war, yield curve inversions of some US Treasury bonds that were first seen for more than a decade, and the US Federal Reserve’s continuing interest rate hikes.

However, such concerns allowed Hong Kong dollar market funds to perform better than others because of their effectiveness in hedging risks.

Such funds tracked by Convoy rose 1.25 percent in December and 0.14 percent for the entire year.

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