Developed Market Equities Continue to Lead MPFs

U.S. equity and global equity funds outperform most categories in the short, medium, and long term. 

Kate Lin, CAIA 09 September, 2021 | 12:04
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The U.S. Federal Reserve says it has no intention to rush a “tapering” of its bond purchases, or to raise rates. At the latest Jackson Hole symposium, Fed chair Jerome Powell said that the central bank would delink scaling back bond purchases and rate adjustments. While the Fed weighs ending asset purchase by mid-2022, global rates are set to stay low for at least another 12 months. MPFs investing in global bond strategies ended August with a 0.5% loss. It is also the only MPF category that marked a negative return in the past 12 months.

Equity funds investing in the developed markets including Japan, US, Global and European equities continue to lead the pack.

A lagging vaccination rate and growing concerns over the fast-spreading Delta variant of the coronavirus have worried investors in Japan equity, especially after the country announced a state of emergency for the capital Tokyo. The dip in the broad market did not deter the three Japan equity funds in the MPF scheme. All of them posted a positive return in August.

U.S. Equity and Global Equity closely followed with a 2.91% and 2.58% single-month gain. The two categories have been delivering a consistent outperformance over the past three years, leading the pack with a double-digit annualized return. Mass MPF U.S. Equity is the best performing equity fund in the scheme on a three-year basis. The three-year annualized return was 21.51% during the period, outperforming the 17.71% return of S&P 500 Index.






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Kate Lin, CAIA

Kate Lin, CAIA  is a Data Journalist for Morningstar Asia, and is based in Hong Kong

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