【September 4, 2024】 – GUM announces the MPF performance of August today. In August 2024, the “GUM Composite MPF Index” rose by 1.8% to 243 points, while the “GUM MPF Equity Fund Index” rose by 2.5% to 324 points. The “GUM MPF Mixed Assets Fund Index” increased by 1.8% to 247 points, and the “GUM MPF Fixed Income Fund Index” rose by 0.6% compared to the previous month, reaching 128 points. In August 2024, the average gain per member in the MPF was HK$ 4,763, with a total gain of HK$ 18,598 for the year.
GUM’s Managing Director, Michael Chan, pointed out “August data reflects that the U.S. economy is beginning to decline, coupled with Japan’s interest rate hike triggering unwinding in carry trades. Global equities and bonds have experienced extreme volatility, with rate cut expectations almost recovering losses in the stock and bond markets. The risks from unwinding yen carry trades have not been eliminated, and the ongoing Israel-Palestine conflict and Russia-Ukraine conflict are intensifying. As the risks associated with the U.S. presidential election become more pronounced, investors need to balance their risks and avoid concentrating on a single market. Benefiting from a rebound in Hong Kong stocks, the overall MPF index this year can still perform well.”
For the asset allocation, GUM’s Strategy and Investment Analyst, Martin Wan stated, “The U.S. equity funds have reported a return of 17% from the beginning of the year to now. Due to the uncertainty brought by the U.S. presidential election, investors may consider diversifying their risks into equity funds or bond funds from other regions. More aggressive investors might allocate some portions to equity assets in Europe and Asia. Additionally, although a rate cut cycle may reduce the returns of “MPF Conservative Funds,” these funds still represent a reasonable choice for low-risk members.”
Table 1: Overall performance of MPF and average return in August
| Index | Value | August Return (%) | 2024 YTD Return (%) |
| GUM MPF Composite Index | 243 | +1.8% | +7.6% |
| GUM MPF Equity Fund Index | 324 | +2.5% | +10.3% |
| GUM MPF Mixed Asset Fund Index | 247 | +1.8% | +7.5% |
| GUM MPF Fixed Income Fund Index | 128 | +0.6% | +2.3% |
| Average MPF Gain/Loss Per Member Note 1 (HK$) | +4,763 | +18,598 | |
Analysis of Equity Fund Performance
The GUM MPF Equity Fund Index saw an overall return increase of 2.5% in August. Although early in the month there were concerns about a recession triggered by rising unemployment rates in the U.S. and an unexpected interest rate hike by the Bank of Japan that led to a sell-off of the yen, global stocks experienced a sharp drop, referred to as “Black Monday.” However, subsequent U.S. economic data, such as retail sales, initial jobless claims, and inflation, all performed better than expectations, alleviating recession fears in the market. Additionally, Bank of Japan Deputy Governor Masayoshi Amamiya’s statement that interest rates would not be raised if financial markets remained unstable helped stabilize market confidence, allowing the MPF index to gradually recover throughout August. All equity fund index categories have increased YTD, with Japan, U.S., other global, and Asian equity funds achieving double-digit gains, which is encouraging.
Table 2: Ranking of Equity Fund Performance According to August 2024 Return
| Ranking | Equity Sub-category Fund Index | August Return (%) | 2024 YTD Return (%) |
| 1 | Other Equity Fund | 5.2% | 15.6% |
| 2 | Hong Kong Equity (Index Tracking) Fund | 3.8% | 6.6% |
| 3 | European Equity Fund | 2.4% | 8.8% |
| 4 | Hong Kong Equity Fund | 2.3% | 3.1% |
| 5 | Global Equity Fund | 2.1% | 13.4% |
| 6 | United States Equity Fund | 1.9% | 17.4% |
| 7 | Greater China Equity Fund | 1.8% | 5.2% |
| 8 | Asian Equity Fund | 1.6% | 11.9% |
| 9 | Japan Equity Fund | 0.7% | 18.9% |
Analysis of Mixed Assets Fund Performance
The GUM MPF Mixed Assets Index increased by 1.8% in August. The top-performing fund category for the month was the “Target Date Fund,” which recorded a 2.1% rise. Following closely were the “Mixed Asset- (>60-80% Equity),” “Mixed Asset- (>80-100% Equity),” “DIS – Core Accumulation Fund,” and “Dynamic Allocation Fund,” all of which achieved a 1.8% increase. Expectations for interest rate cuts boosted bond prices, and with global stock markets generally rebounding in August, mixed asset funds performed well. The best-performing mixed asset funds were the “DIS- Core Accumulation Fund” and the ” Mixed Asset- (>80% to 100% Equity)” YTD, which recorded returns of 9.7% and 9.3%, respectively.
Table 3: Ranking of Mixed Assets Fund Performance According to August 2024 Return
| Ranking | Mixed Assets Sub-category Fund Index | August Return (%) | 2024 YTD Return (%) |
| 1 | Target-Date Fund | 2.1% | 9.2% |
| 2 | Mixed Asset- (60-80% Equity) Fund | 1.8% | 7.3% |
| 3 | Mixed Asset- (80-100% Equity) Fund | 1.8% | 9.3% |
| 4 | DIS Core Accumulation Fund | 1.8% | 9.7% |
| 5 | Dynamic Allocation Fund | 1.8% | 5.4% |
| 6 | Mixed Asset- (40-60% Equity) Fund | 1.7% | 5.4% |
| 7 | Mixed Asset- (20-40% Equity) Fund | 1.7% | 3.5% |
| 8 | DIS Age 65 Plus Fund | 1.2% | 4.0% |
| 9 | Other Mixed Asset Fund | 1.1% | 3.0% |
Analysis of Fixed Income Fund Performance
The Chair of the U.S. Federal Reserve stated at the Jackson Hole global central bank meeting that “It’s time to adjust policy.” The market widely expects the U.S. to cut interest rates by 0.25% to 0.5% in September. As the global economy enters a rate-cutting cycle, bond funds are performing well, with all categories of bond funds recording positive returns. In August, the highest-performing fixed-income funds were the “RMB Bond Fund” and the “Global Bond Fund,” which rose by 1.9% and 1.7% respectively. The best-performing fixed-income funds are the “Global Bond Fund” and the “Hong Kong Dollar Bond Fund” YTD with returns of 4.1% and 3.7% respectively. The “MPF Conservative Fund,” which previously benefited from high interest rates, still has an YTD return of 2.6%.
Table 4: Ranking of Fixed Income Fund Performance According to August 2024 Return
| Ranking | Fixed Income Sub-category Fund Index | August Return (%) | 2024 YTD Return (%) |
| 1 | RMB Bond Fund | 1.9% | 3.1% |
| 2 | Global Bond Fund | 1.7% | 4.1% |
| 3 | Asian Bond Fund | 1.4% | 3.2% |
| 4 | RMB & HKD Money Market Fund Fund | 1.3% | 2.0% |
| 5 | Hong Kong Dollar Bond Fund | 1.2% | 3.7% |
| 6 | HKD Money Market Fund | 0.6% | 3.3% |
| 7 | Guaranteed Fund | 0.5% | 1.8% |
| 8 | MPF Conservative Fund | 0.3% | 2.6% |
Remarks:
The average MPF return per member is calculated using total MPF assets HK$1,237,278 millions of the previous month (31 July 2024). The number of MPF Scheme members was 4,754,000 as of 31 December 2023. The latest average assets per member was HK$260,260 as of 31 July 2024. The GUM MPF Composite Index return for August 2024 as of August 31, 2024.
*The growth of all fund categories indexes is calculated by asset-weighted point-to-point growth. The data for August 2024 return is summarized from 1 August to 31 August 2024.
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