Top MPF Gainers and Losers in November 2023

Most MPF categories posted negative returns, except cash-management products.

Kate Lin 08 November, 2023 | 10:12
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In October this year, MPF funds lost 2.5% on average. Equity funds fell 3.7% on average, followed by an average 2.5% loss for allocation funds. Fixed-income funds were also in the red, falling 0.9% on average. So far this year, the scheme’s funds have generated a 2.2% negative return for contributors.

A Tough Month for Equity Funds

Last month, the 10-year U.S. Treasury yield, a common barometer to indicate the risk-free rate level, crossed 5% for the first time since 2007. The prospect of interest rates staying higher for longer also played a part in dragging equity fund performances.

On average, equity funds fell 3.7%. Hong Kong equity and China & Greater China equity funds continued to underperform other categories in the scheme, losing 4.3% and 4.2% respectively. The best-performing equity categories, U.S. and global equity, were also in the red, but with a smaller loss.

The year-to-date winners, Japan equity MPFs, averaged a 3.1% loss this month, which narrowed their gains for the year to 12.3%. U.S. equity MPFs ranked second, with an average of 10.8% gain so far in 2023. It’s worth mentioning that U.S. equity MPFs generated an annualized return of around 8-9% for the past 15 years and is the winner for the five-, 10-, and 15-year periods. Moreover, Europe equity MPFs were the best performers in a 3-year reporting window.

Global bonds slumped last month as well, with a 1.3% fall. Asia, China, and HKD bond MPFs registered minimal losses for the month. So far this year, only HKD bond funds remained in the green, giving out a 1.0% return.

The negative return in aggressive allocation and target date funds was in line with equity funds’ losses. Meanwhile, less risky options, such as DIS – Age 65 plus and cautious allocation posted a loss of slightly over 1% for the month. For the first 10 months of 2023, the DIS – Core accumulation fund was the only sub-category that delivered a positive return. At the end of October, investors gained 3.7% from the pre-set strategy.

Top and Bottom Funds

Cash-management products investing in the Hong Kong dollar occupied the top 10 funds by October return. To find the top-performing fund that isn’t a money-market fund, MPF contributors will have to go down to the 34th place, taken by Principal Smart Plan-Guaranteed, which gave out a flat return in October. The worst performers, though, were a motley crew. Two share classes of the Haitong Korea fund were at the bottom with a 6.9% loss. The firm’s Hong Kong strategy followed as the fund returned minus 6.1%. Fidelity RMT European MPF, launched in August 2023, was also a poor performer. The fund produced a 5.2% loss.

On a year-to-date basis, Manulife GS MPF N Amer Eq led more than 460 share classes of MPFs with a 20.0% gain. This is closely followed by China Life Retire-Easy Global Equity’s 19.6% and China Life US Equity’s 17.71%. BEA (MTS) Japan Equity rode on investors’ renewed interest in Japan, posting a 14.0% gain. The losing streak for Hong Kong equity and China & greater China equity has not ended. A total of 75 funds from either of the categories were at the bottom. Hang Seng MPF-ST Plus-Asia Pacific Eq ranked 76th as the fund slid 10.5% so far this year. 

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About Author

Kate Lin

Kate Lin  is an Editor for Morningstar Asia, and is based in Hong Kong

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