Hong Kong’s MPF pension scheme reports third-best year of the decade, returning 12.6 per cent in 2019, with stock funds the biggest winners
- Top of the league were US equity funds with an average return of 27.9 per cent return, while Greater China funds came second on 23.2 per cent
- Investors are warned to pay attention to risks in 2020, with trade war, Brexit and Hong Kong protests potentially hurting MPF investments
Hong Kong’s compulsory pension scheme has reported its third-best performing year in the last decade as a global stock market rally last year helped produce an average return of 12.6 per cent, according to data from Lipper Refinitiv released on Friday.
It represents a turnaround from a loss of 8.3 per cent in 2018. It is the joint-third highest annual gain since 2008, lower than the 20.9 per cent in 2017 and 27. 5 per cent in 2009 and the same as the return in 2012.
It is however only the fifth-highest return since Lipper started tracking the fund’s performance in 2005.
The Mandatory Provident Fund (MPF) is a compulsory retirement scheme that covers 2.9 million people in the city, allowing employees to choose how to allocate their contributions into different investment funds.
Those opting to put their pension assets in stock funds were the biggest winners last year. Top of the league were the US equity funds which generated an average return of 27.9 per cent return in 2019. Their strong performance came as the US markets reached a record high, with the S&P 500 rising 29 per cent last year, the best annual gain since 2013.
In second place was the Greater China equity fund, which saw an average gain of 23.2 per cent, thanks to the Shanghai stock market climbing 22 per cent. Hong Kong-listed Chinese firms, known as H shares, also rose 10 per cent during the same period.