Stock market rout sees MPF members’ China fund returns sink 12.4 per cent in July after Beijing’s tech crackdown

The MPF’s China stock funds on average lost 12.4 per cent in July, the worst among the 400-odd investment funds tracked by Refinitiv Lipper

Money invested in US and European stock funds grew as they generated small gains during the month

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The Hong Kong stock market’s dismal performance last month hit returns of MPF members who have invested in shares of companies listed in the city. Photo: AP Photo

Published: 12:01pm, 5 Aug 2021Updated: 11:04pm, 5 Aug 2021

The slump in Hong Kong and China stocks last month has hurt millions of Mandatory Provident Fund members who elected to invest their money in funds dedicated to these markets. Analysts urged contributors not to panic as the volatility could subside soon.

The Mandatory Provident Fund Schemes Authority (MPFA), the regulator overseeing the city’s HK$1.2 trillion (US$154.4 billion) retirement pot, told its 4.5 million contributors to keep their focus on the long term, despite the adverse stock market sentiment in recent weeks.

China stock funds, which invest mainly in shares of Chinese companies listed in Hong Kong, lost 12.4 per cent on average last month, the worst performers among the nearly 400 investment funds tracked by Refinitiv Lipper. These funds gained 2 per cent on average in the first half this year.

MPF members investing in Hong Kong stock funds suffered a 9.8 per cent decline, compared with an almost 6 per cent gain in the first six months, the data showed.

The benchmark Hang Seng Index slumped 10 per cent while the Tech Index sank 17 per cent last month in the market’s worst performance in three years, triggered by China’s tightening of regulations in the technology and private education sectors.

The sell-off caused the nearly 400 MPF investment funds to lose 2.2 per cent on average in July, or HK$26.4 billion, according to calculations by the Post, based on data provided by Refinitiv. That is equivalent to a HK$5,866 setback per member. The scheme handed its members a 4.5 per cent return in the January-to-June period.