NewHong Kong’s MPF pension fund falls 4.77 per cent in January in worst performance since August
China and Hong Kong stock funds the worst performers during the month
The Mandatory Provident Fund covering 2.5 million Hong Kong employees lost 4.77 per cent in January, its worst monthly loss for retirement funds since August of last year with most of the fund categories ending the month in the red, according to data company Thomson Reuters Lipper.
Hong Kong and China stocks funds were the top losers, with China equity funds sinking 13.35 per cent while Hong Kong equity funds dropped 10.88 per cent. The MPF’s monthly performance declined for the third month in a row.
The red ink is in line with the performance of Chinese stocks, with the Shanghai Composite Index losing 22.7 per cent in January, its worst monthly performance since October 2008. Hong Kong’s benchmark Hang Seng Index fell 10.2 per cent loss for January, also its biggest monthly decline since August.
“With so much headwinds such as the slowing Chinese economy and other uncertainties, the MPF industry will see a challenging year ahead,” said Rex Auyeung, the Asia president at Principal Financial Group, a leading MPF provider in the city.
“In fact, this challenge applies to the investment community at large and the MPF industry cannot escape. In a situation like this, being conservative never hurts.”
January marked the worst MPF return since August last year when it fell 5.16 per cent, a time coinciding with the shock devaluation of the Chinese yuan when the Hong Kong and mainland markets also had to contend with a rout that deflated equities after hitting a 7-year peak in June.
Ben Kwong Man-bun, executive director and head of research of KGI Asia, said the MPF investment would continue to face tough market conditions in the first half of this year.