Hong Kong’s Mandatory Provident Fund (MPF) registered a return of 11.7 per cent in 2020 and annualised return of 4.8 per cent since inception of the MPF System in 2000, according to the MPF Authority (MPFA).
The annualised return was 0.7 percentage point higher than in 2019, outperforming the inflation rate of 1.8 per cent over the same period, according to the announcement.
As of the end of December 2020, the total MPF assets amounted to HK$1.14 trillion ($147 billion), of which HK$410 billion, or 36 per cent was investment returns, net of fees and charges.
“Notwithstanding the impact created by the COVID 19 pandemic on the global economy since early 2020, the total MPF assets increased steadily over the past year, recording a double-digit investment return for the second consecutive year, reflecting the long-term resilience and stability of the MPF System,” said MPFA Chief Corporate Affairs Officer and Executive Director Cheng Yan-chee.
In 2020, all six MPF fund types – equity funds, mixed asset funds, bond funds, guaranteed funds, MPF conservative funds, and money market funds – posted positive returns.
Equity funds and mixed asset funds registered returns of 15.1 per cent and 13.2 per cent, respectively. Bond fund returns recorded a year-on-year increase of 3.5 percentage points to 7.7 per cent, making it the fund type with the largest increase in investment returns last year.
Cheng encouraged scheme members with insufficient investment knowledge or time to manage their MPF to consider the DIS. He also reminded scheme members that the MPF is a long-term investment spanning 30 to 40 years and that short-term volatility in the financial markets from time to time is inevitable.
He advised scheme members to allocate their investment portfolio according to their risk tolerance level and stage of life, and should not try to time the market. – BusinessNews.ph