Hong Kong's MPF pension fund rings up gains on back of stock market rally

Long-suffering Mandatory Provident Fund account holders have received some rare good news, with the city's compulsory employee savings scheme enjoying its best average monthly return in years at 5.28 per cent - thanks to the stock market boom.

Last month's return for the MPF accounts, which cover 2.5 million employees, dwarfed the gains of 0.07 per cent in March and 2.67 per cent in the first quarter, data company Lipper said yesterday. The advance also far outstripped the 1.5 per cent rise for last year, the lowest in three years.

Market rallies that have hoisted stocks to their loftiest levels since 2007, in Hong Kong and on the mainland, drove the turnaround in MPF accounts.

Almost all funds returned to the black in April, bolstered by the rally and an improvement in bonds and overseas markets. Many MPF investment funds had bled red ink in March.

Mainland China funds took the lead with an 18.05 per cent gain for last month, followed by Hong Kong stock funds at 14.37 per cent and Greater China funds at 13.28 per cent.

The returns of the mainland funds matched those of the Shanghai Composite Index, which surged 18 per cent for the month. The benchmark Hang Seng Index jumped 13 per cent last month, the strongest monthly gain since 2009.