Hong Kong’s MPF bounces back with 3.5% annual gain, the first since 2020, as pension scheme adds US$4.8 billion in value

The 3.5 per cent gain, which works out to about US$1,025 per member, follows losses of 15.7 per cent in 2022 and 0.3 per cent in 2021

Rallies in US and Japan equities drove the increase, but poor performance by Hong Kong and China stocks bit into many members’ nest eggs

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People walk through an MTR station during the morning commute in Central, Hong Kong, on November 16, 2023. Photo: Jonathan Wong

Published: 9:30am, 4 Jan 2024Updated: 12:35pm, 4 Jan 2024

Hong Kong’s compulsory retirement scheme, which covers 4.7 million people in the city, reported investment gains of 3.5 per cent in 2023 – the first increase since 2020 – thanks to strong market rallies in the US, Japan and other non-Chinese markets.

Bouncing back from a loss of 15.7 per cent in 2022 and a loss of 0.3 per cent in 2021, the Mandatory Provident Fund (MPF) gained HK$37.4 billion (US$4.8 billion) in 2023, or HK$8,000 per member, according to data from MPF Ratings, an independent research firm. The fund’s last gain was 11.4 per cent in 2020.

The MPF appeared to be headed for an unprecedented third year of losses at the end of the third quarter, when a huge loss of HK$35.2 billion wiped out gains made in the first half of the year.

“Encouraging late-year inflation readings and the foreshadowing of lower US interest rates helped the MPF system achieve its first positive annual return in three years,” said Francis Chung, MPF Ratings chairman.

The headquarters of the Mandatory Provident Fund Schemes Authority in Hong Kong’s Kwun Tong district. Photo: Enoch Yiu

However, poor performance by China and Hong Kong stocks took a bite out of many members’ nest eggs.

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