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
Facebook Twitter LinkedIn

image

 

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.

 

image

 

image

 

©2021 Morningstar. All rights reserved. The information, data, analyses and opinions presented herein do not constitute investment advice; are provided as of the date written, solely for informational purposes; and subject to change at any time without notice. This content is not an offer to buy or sell any particular security and is not warranted to be correct, complete or accurate. Past performance is not a guarantee of future results. The Morningstar name and logo are registered marks of Morningstar, Inc. This article includes proprietary materials of Morningstar; reproduction, transcription or other use, by any means, in whole or in part, without prior, written consent of Morningstar is prohibited. This article is intended for general circulation, and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. Investors should consult a financial adviser regarding the suitability of any investment product, taking into account their specific investment objectives, financial situation or particular needs, before making any investment decisions. Morningstar Investment Management Asia Limited is licensed and regulated by the Hong Kong Securities and Futures Commission to provide investment research and investment advisory services to professional investors only. Morningstar Investment Adviser Singapore Pte. Limited is licensed by the Monetary Authority of Singapore to provide financial advisory services in Singapore. Either Morningstar Investment Management Asia Limited or Morningstar Investment Adviser Singapore Pte. Limited will be the entity responsible for the creation and distribution of the research services described in this article.

 

Facebook Twitter LinkedIn

About Author

Kate Lin, CAIA

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

© Copyright 2021 Morningstar Asia Ltd. All rights reserved.

Terms of Use        Privacy Policy