GUM: February MPF Generates Average Earnings of HK$7,384 per Person; HK and China Equity Outperform Market

Mar 5, 2024
Reading Time: 8 minutes

【March 5, 2024】 – In February 2024, the “GUM MPF Composite Index” rose by 3.1% to reach 227.6 points. The “GUM MPF Equity Fund Index” increased by 5.2% to reach 297.5 points. The “GUM MPF Mixed Asset Fund Index” rose by 2.4% to reach 232.5 points. The “GUM MPF Fixed Income Fund Index” increased by 0.1% compared to the previous month, reaching 125.6 points. In February 2024, the average earnings per member of the MPF were HK$7,384, with a total annual earnings of HK$2,352.

GUM’s Managing Director, Michael Chan, pointed out “The Hong Kong stock market experienced a significant rebound in February. The main reasons for this were the market’s anticipation of stimulus policies from the central government in March and the announcement in the Hong Kong Budget that the stamp duty on the property market would be completely abolished, stimulating citizens’ purchasing intentions. The upcoming “Two Sessions” in March may bring more insights from the central government regarding the economy. Investors should exercise caution and closely monitor market dynamics.” He further stated, “The stock market had a positive start in 2024, with the US and Japanese markets continuing the upward trend from last year. Although the Chinese and Hong Kong markets were relatively weak in January, they experienced a significant rebound in February, with MPF equity funds leading the gains. Additionally, since the market generally believes that the Federal Reserve will not start reducing interest rates until mid-year, “MPF Conservative funds” can still benefit from a high-interest environment, making them a prudent choice for conservative investors.”

Table 1: Overall performance of MPF and average return in February

IndexValueFebruary Return (%)2024 YTD Return (%)
GUM MPF Composite Index227.63.1%0.9%
GUM MPF Equity Fund Index297.55.2%1.3%
GUM MPF Mixed Asset Fund Index232.52.4%1.1%
GUM MPF Fixed Income Fund Index125.60.1%0.0%
Average MPF Gain/Loss Per Member Note 1 (HK$)+7,384+2,352

Analysis of Equity Fund Performance

In February, MPF Equity funds performed well across the board, with significant rebounds observed in the China and  Hong Kong markets. The “Greater China Equity Fund” and the “Hong Kong Equity Fund” were the top performers, rising by 7.2% and 6.8% respectively in February. However, they still recorded a decline of 1.7% and 3.5% respectively YTD. The “US Equity Fund” continued its positive performance after the February reporting period, with a 5.1% increase. The “Asian Equity Fund” rose by 4.4%. In comparison, the “European Equity Fund” had relatively weaker performance, with a modest increase of 2.1%. The “Japan Equity Fund,” which performed the best last month, also saw a rise of 3.1%, leading other equity funds with a total increase of 8.4% for the year.

Table 2: Ranking of Equity Fund Performance According To February 2024 Return

RankingEquity Sub-category Fund IndexFebruary Return (%)2024 YTD Return (%)
1Greater China Equity Fund7.2%-1.7%
2Hong Kong Equity Fund6.8%-3.5%
3Hong Kong Equity Fund (Index Tracking)6.6%-3.9%
4United States Equity Fund5.1%6.7%
5Asian Equity Fund4.4%0.9%
6Global Equity Fund4.1%4.6%
7Other Equity Fund3.3%5.5%
8Japanese Equity Fund3.1%8.4%
9European Equity Fund2.1%2.3%

Analysis of Mixed Assets fund performance

In February, Mixed Asset funds benefited from the rebound in the China and Hong Kong stock markets. The “80% to 100% Equity Fund” and “Target Date Fund” both saw a close to 4% increase. However, the “DIS – 65 Plus Fund,” which has a higher allocation to bonds, had a weaker performance with a slight increase of 0.1%. This is believed to be due to indications from the Federal Reserve that an interest rate cut may not occur in March, which created pressure on the bond market.

For YTD, the “DIS – Core Accumulation Fund,” which has a broader geographical distribution, performed better with a 2.6% increase. These funds benefit from portfolio diversification across different regions, mitigating the risk of a market downturn in a single region.

Table 3: Ranking of Mixed Assets Fund Performance According To February 2024 Return

RankingMixed Assets Sub-category Fund IndexFebruary Return (%)2024 YTD Return (%)
1Mixed Asset Fund – (>80-100% Equity)3.8%1.5%
2Target Date Fund3.6%0.9%
3Mixed Asset Fund- (>60-80% Equity)2.9%0.9%
4DIS Core Accumulation Fund2.2%2.6%
5Mixed Asset Fund- (>40-60% Equity)1.7%0.0%
6Dynamic Allocation Fund1.6%-0.2%
7Other Mixed Asset Fund0.7%-0.7%
8Mixed Asset Fund – (>20-40% Equity)0.6%-0.8%
9DIS Age 65 Plus Fund0.1%-0.1%

Analysis of Fixed Income Fund Performance

According to the current market consensus, it is expected that the Federal Reserve will begin cutting interest rates in the middle of the year. This has put pressure on bond funds, with the “Global Bond Fund” experiencing the worst performance, falling by 1.2% in February. The “Hong Kong Dollar Bond Fund” and “Asian Bond Fund” also declined by 0.7% and 0.5% respectively, with YTD declines of 1.1% and 0.7%.

On the other hand, the “MPF Conservative Fund” and “Guaranteed Fund” have relatively better performance, with increases of 0.3% and 0.2% respectively. The “MPF Conservative Fund” benefits from the high-interest environment and achieved growth of 0.3% in February and 0.7% YTD, making it the top performer among similar funds.

Table 4: Ranking of Fixed Income Fund Performance According To February 2024 Return

RankingFixed Income Sub-category Fund IndexFebruary Return (%)2024 YTD Return (%)
1Conservative Fund0.3%0.7%
2Guaranteed Fund0.2%-0.2%
3HKD Money Market Fund0.1%0.4%
4RMB Bond Fund0.1%0.1%
5RMB & HKD Money Market Fund0.0%-0.1%
6Asian Bond Fund-0.5%-0.7%
7Hong Kong Dollar Bond Fund-0.7%-1.1%
8Global Bond Fund-1.2%-2.3%

Remarks:

The average MPF return per member is calculated using total MPF assets of the previous month, which was HK$ 1,121,691 million as of 31 January 2024. The latest average assets per member was HK$238,962 as of 31 January 2024. The number of MPF Scheme members was 4,694,000 as of 31 March 2023. The GUM MPF Composite Index return for February 2024 as of February 29, 2024.

*The growth of all fund categories indexes is calculated by asset-weighted point-to-point growth. The data for February 2024 return is summarized from 1 February to 29 February 2024. 

中文版本:

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About GUM 

GUM is a boutique consulting firm that provides solutions to corporate on MPF and employee benefits. We focus on people and that is why we put “U” in the very core of our brand “GUM”.  Our priorities are always meeting the needs of our corporate clients and their employees, our strategic partners as well as all MPF members of Hong Kong. With our vast market experience and expert teams around actuarial, investment and employee communication, GUM leads the market to innovate, walking hand in hand with our clients to go faster and further. 

Media Enquiries, please contact: 

GUM 

Miss Cherry Chan / Miss Karen Siu 

Phone: (852) 9126-9200 / (852) 6011-5603  

Email: : cherrychan@gumhk.com / karensiu@gumhk.com  

Website: www.gumhk.com 

This document provided the information on an “AS IS” basis. The Company undertakes no obligation to update any of the information contained in this document. Some information contained in this document contains forward-looking statements. The words “believe”, “expect” and similar expressions are also intended to identify forward-looking statements. These forward-looking statements are not historical facts. Rather, these forward-looking statements are based on the current beliefs, assumptions, expectations, estimates, and projections of our management. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Consequently, actual results could differ materially from those expressed, implied or forecasted in these forward-looking statements. Reliance should not be placed on these forward-looking statements.

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