【Hong Kong, June 5, 2024】 – GUM announces May’s full-month MPF performance today. In May 2024, the “GUM MPF Composite Index” rose 2.1% to 235.3 points; the “GUM MPF Equity Fund Index” rose 2.8% to 313.3 points; the “GUM MPF Mixed Asset Fund Index” rose 2.2% to 238.6 points; the “GUM MPF Fixed Income Fund Index” rose 0.5% to 126.4 points. In May 2024, the average MPF member gained HKD$5,208, with an YTD total of HKD$10,658 profit.

Michael Chan, Managing Director of GUM, stated that: “The MPF market recorded a well performance in May, with all equity fund indices recording positive returns. Among them, the central government’s measures to stimulate the domestic real estate market in May helped rebuild investor confidence, which is beneficial for the long-term development of the China-Hong Kong market. At the same time, the US stock market was also supported by the good performance of large technology stocks, with the S&P 500 index challenging the 5,300-point level again. Although there was a pullback in the stock market at the end of the month, the overall monthly performance still maintained a positive return. However, amid the recent tensions in the Taiwan Strait and the uncertainty surrounding the Russia-Ukraine conflict, these factors may impact investment sentiment, and we will adopt a cautious stance on the performance of the MPF in the coming months.”

In terms of asset allocation, Martin Wan, Strategy and Investment Analyst of GUM, further stated: “The Hong Kong stock market rebounded in April, and there are signs of capital inflows, which has increased its investment value. At the same time, the market expects that Europe will start interest rate cuts earlier than the United States in June, which will benefit the performance of the European stock market. Aggressive MPF members can consider a balanced allocation to related funds. For members and investors with lower risk tolerance, they can pay attention to the “MPF Conservative Fund”, as the market generally expects the US Federal Reserve to cut interest rates until September, and the “MPF Conservative Fund” can continue to benefit from the high-interest rate environment.”

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

Analysis of Equity Fund Performance

In May 2024, although the global stock market experienced some pullback at the end of the month, all equity fund indices still recorded positive returns. Among them, the “United States Equity Fund” and “European Equity Fund” had single-month gains of over 4%, performing the best. YTD the ” United States Equity Fund” and ” Japanese Equity Fund” have risen by over 10%. The “Global Equity Fund” and “European Equity Fund” have also seen decent gains. It is worth noting that the “Hong Kong Equity Fund” and “Hong Kong Equity Fund (Index Tracking)” have recorded positive returns for 4 consecutive months.

Table 2: Ranking of Equity Fund Performance According to May 2024 Return

Analysis of Mixed Assets fund performance

In May, the performance of the mixed asset funds was also impressive. The top two ranking funds were the “Target-Date Fund” and the “DIS Core Accumulation Fund”, which recorded a 2.7% return in May and have risen 5.8% and 4.6% YTD respectively. Closely following were the “Mixed Asset Fund – (>80-100% Equity)” and the “Mixed Asset Fund- (>60-80% Equity)”, which recorded 2.5% and 2.1% returns in May and have also seen gains of over 4% YTD. On the other hand, “DIS Age 65 Plus Fund” performed relatively worse, recording a 1.3% return in May, but still has a 0.1% gain YTD.

Table 3: Ranking of Mixed Assets Fund Performance According to May 2024 Return

Analysis of Fixed Income Fund Performance

The fixed income funds also performed well in May. The “Asian Bond Fund” stood out as the best performer among the Fixed Income Funds with a 1.3% monthly return. The “Global Bond Fund” and the “Hong Kong Dollar Bond Fund” also had respectable performances, with monthly returns of 1.0% and 0.9% respectively.

However, the more conservative fixed income products such as the “Guaranteed Fund”, “HKD Market Fund”, and the “MPF Conservative Fund” had monthly returns only between 0.3% to 0.5%, but have recorded positive growth YTD. So far this year, as expectations for US interest rate cuts have cooled, bond funds have recorded negative returns since the beginning of 2024, with the “Global Bond Fund” performing the worst, down 3.3% for the full year.

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

Remarks:

The average MPF return per member is calculated using total MPF assets HK$1,184,728 millions of the previous month (30 April 2024). The number of MPF Scheme members was 4,754,000 as of 31 December 2023. The latest average assets per member was HK$249,207 as of 30 April 2024. The GUM MPF Composite Index return for May 2024 as of 31 May, 2024.

*The growth of all fund categories indexes is calculated by asset-weighted point-to-point growth. The data for May 2024 return is summarized from 1 May to 31 May 2024.

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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.

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