1.9% Increase in MPF Assets in March, Strong Demand for Japanese equity funds, Bond-Related Switching Faces Setbacks

Apr 23, 2024
Reading Time: 6 minutes

【Hong Kong, April 23, 2024】GUM released the MPF Market Analysis Report March 2024 today. As of March, the total assets of the MPF market rose by 1.9% to HKD 1.18 trillion. In terms of market share, Manulife remained in the lead with a share of 28.0%, followed by HSBC (17.6%) and Sun Life (10.8%) in second and third place, respectively.

In 2024 YTD, Manulife’s market share saw a noticeable change increasing by 0.27%, primarily driven by investment returns. HSBC increased 0.02%, while Sun Life’s market share decreased by 0.17%. Fourth-ranked AIA saw a slight increase of 0.03% in market share, reaching 9.1%. BOC-Prud secure the fifth spot with 7.3% market share. [Refer to Table 1 for details]

Table 1: 2024 YTD Market Share of MPF Providers (Top 10)

 2024 YTD Change in Market Shares
Market Share RankProviderMarket SharesDue to Net SwitchingDue to Investment ReturnTotal change
3Sun Life10.8%0.02%-0.19%-0.17%
7Hang Seng5.7%0.00%-0.01%-0.01%

In the first quarter of 2024, the “Mixed Asset Fund” and “Fixed Income Fund” had capital outflows of HKD 3.29 billion and HKD 0.84 billion, respectively, which flowed into the “Equity Fund,” reflecting members’ preference for higher-risk funds. [Refer to Table 2 for more details]

Table 2:Net Fund Switching in Major Asset Categories in 2024Q1

In Q1, the top five asset types with the highest net switching out were ”Hong Kong Equity Fund”, “Mixed Asset Fund (>80% -100% Equity)”, “Greater China Equity Fund”, “Mixed Asset Fund (>60% -80% Equity)” and “Hong Kong Equity Fund (Index Tracking)”.

On the other hand, The top five asset types with the highest net inflows include the “United States Equity Fund”, “DIS – Core Accumulation Fund”, “Global Equity Fund”, “Japan Equity Fund”, and “Global Bond Fund”, which together account for over 90% of the total fund transfers. Particularly noteworthy is the “Japan Equity Fund,” which accounts for 10% of the total fund inflows, considering that this fund represents only around 1% of the MPF market.” [Refer to Table 3 and Table 4 for details]

GUM’s Strategy and Investment Analyst , Martin Wan, pointed out, “In Q1, there was a strong demand for Japanese stocks as a total of 1.5 billion was invested in Japanese equity funds. Although Japanese equity funds make up less than 1% of MPF’s total assets and there are only three providers offering them, members can consider the proportion of Japanese stocks in certain Asian funds to align with their risk and investment preferences. Additionally, expectations of interest rate cuts boosted inflows into global bond funds, but unexpected US inflation data dampened bond fund performance. It’s important for members to view MPF as a long-term retirement investment and avoid trying to time the market based on short-term fluctuations.”

Table 3: Top Five Fund Asset Types with Net Fund Switching out in 2024Q1 (in HKD million)

RankAsset Class2024Q1
1Hong Kong Equity Fund(HK$2,896)
2Mixed Asset Fund (>80-100% Equity)(HK$2,489)
3Greater China Equity Fund(HK$2,193)
4Mixed Asset Fund (>60-80% Equity)(HK$1,827)
5Hong Kong Equity Fund (Index Tracking)(HK$1,382)

Table 4: Top Five Fund Asset Types with Net Fund Switching in 2024Q1 (in HKD million)

RankAsset Class2024Q1
1United States Equity FundHK$7,955
2DIS Core Accumulation FundHK$2,271
3Global Equity FundHK$1,759
4Japanese Equity FundHK$1,539
5Global Bond FundHK$805

-The End-


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