【Hong Kong, September 17, 2024】GUM today released the analysis report on the MPF market for August 2024. As of August 31, the total assets of the MPF market increased by 2.0%, reaching HKD 1.26 trillion. In August 2024, there was an unusual change in net fund flows. HKD 8.19 billion flowed into “fixed income funds,” with the fluctuation significantly higher than the average since the beginning of the year. Among this, HKD 7.85 billion was withdrawn from “equity funds.” This shift indicates that some actively managed MPF investors are clearly leaning towards hedging, primarily due to concerns about a potential U.S. economic recession and a correction in the U.S. stock market, along with increasing expectations for interest rate cuts by the Federal Reserve. [Refer to Table 1 for more details]
Table 1：Net Fund Switching in Major Asset Categories in 2024 YTD
*Figures may not sum up to the total due to rounding
In August, the five asset classes with the highest net outflows were “U.S. Equity Fund,” “Greater China Equity Fund,” “Hong Kong Equity Fund,” “Global Equity Fund,” and “Hong Kong Equity Fund (Index Tracking).” All five categories are equity funds, with a total outflow of nearly HKD 6.38 billion, and the “U.S. Equity Fund” saw the highest single-month outflow at HKD 2.04 billion.
On the other hand, the five asset classes with the highest net inflows in August were “MPF Conservative Fund,” “Global Bond Fund,” “Guaranteed Fund,” “DIS – 65 Plus Fund,” and “DIS – Core Accumulation Fund.” The top three belong to the fixed income category, totaling HKD 7.66 billion in inflows, while the other two are part of the Default Investment Strategy Funds (DIS), which also recorded nearly HKD 1.55 billion in net inflows for the month. [Refer to Table 2 and 3 for more details]
Table 2: Top Five Fund Asset Types with Net Fund Switching out in 2024 Aug (in HK million)
| Rank | Asset Class | 2024 Aug | 2024 YTD |
| 1 | United States Equity Fund | (HK$2,037) | HK$10,823 |
| 2 | Greater China Equity Fund | (HK$1,252) | (HK$4,664) |
| 3 | Hong Kong Equity Fund | (HK$1,191) | (HK$5,972) |
| 4 | Global Equity Fund | (HK$1,019) | HK$2,544 |
| 5 | Hong Kong Equity Fund (Index Tracking) | (HK$881) | (HK$3,842) |
Table 3: Top Five Fund Asset Types with Net Fund Switching in 2024 Aug (in HK million)
| Rank | Asset Class | 2024 Aug | 2024 YTD |
| 1 | Conservative Fund | HK$3,253 | HK$3,893 |
| 2 | Global Bond Fund | HK$2,946 | HK$4,590 |
| 3 | Guaranteed Fund | HK$1,459 | HK$437 |
| 4 | DIS Age 65 Plus Fund | HK$854 | HK$2,276 |
| 5 | DIS Core Accumulation Fund | HK$691 | HK$5,651 |
GUM’s Strategy and Investment Analyst, Martin Wan, pointed out, ” The market anticipates that the Federal Reserve will cut interest rates for the first time in September, signaling the end of a high-interest era that has lasted for two and a half years. However, disappointing U.S. employment data raises concerns about the economic outlook. The flow of funds reflects a change in members’ risk preferences, with nearly HKD 8.2 billion flowing into low-risk assets in August, primarily due to HKD 7.9 billion exiting equity funds, particularly with HKD 2 billion flowing out of U.S. stocks. “
He continued: “At the same time, HKD 3.3 billion and HKD 3 billion flowed into Conservative Funds and Global Bond Funds, respectively, indicating that some members have proactively positioned themselves to lock in returns and allocate bonds in anticipation of rate cuts as the high-interest cycle comes to an end.”
Table 4: 2024 YTD Market Share of MPF Providers (Top 10)
| 2024 YTD Change in Market Shares | |||||
| Market Share Rank | Provider | Market Shares | Due to Net Switching | Due to Investment Return | Total change |
| 1 | Manulife | 28.1% | 0.25% | 0.21% | 0.46% |
| 2 | HSBC | 17.7% | 0.00% | 0.12% | 0.12% |
| 3 | Sun Life | 10.8% | 0.09% | -0.33% | -0.24% |
| 4 | AIA | 9.1% | 0.02% | 0.03% | 0.05% |
| 5 | BOC-Prud | 7.3% | 0.06% | -0.02% | 0.04% |
| 6 | BCT | 7.1% | -0.11% | -0.06% | -0.17% |
| 7 | Hang Seng | 5.7% | -0.02% | 0.04% | 0.02% |
| 8 | Principal | 5.3% | -0.18% | 0.00% | -0.18% |
| 9 | Fidelity | 4.3% | -0.04% | 0.03% | -0.01% |
| 10 | BEA | 2.6% | -0.02% | -0.01% | -0.03% |
In terms of market share, Manulife leads with a 28.1% share, followed by HSBC (17.7%) and Sun Life (10.8%) in second and third place, respectively. Including AIA (9.1%) and Bank of China (7.3%) in fourth and fifth places, the top five providers account for over 72% of the MPF market.
Since the beginning of 2024, Manulife and HSBC have shown noticeable increases in market share, with Manulife’s share rising by 0.46%. HSBC’s market share increased by 0.12%, primarily driven by investment returns. Sun Life experienced the largest decline in market share, dropping by 0.24%, also due to investment returns. Among the non-top five providers, Principal and BCT saw significant declines, with decreases of 0.17% and 0.18%, respectively. [Refer to Table 4 for details]
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