The Mandatory Provident Fund (MPF) faced a tumultuous April, with investment markets experiencing significant fluctuations. According to a report by 积金评级, the MPF managed to recover from an initial sharp decline, ultimately ending the month with a slight loss of approximately 0.61%. This marked the second monthly loss for the fund in 2025, with each member averaging a loss of about 1,700 Hong Kong dollars for the month. However, the cumulative gains from the beginning of the year still stood at about 5,600 Hong Kong dollars per member.
In mid-April, all categories of stock funds recorded losses; yet, a remarkable rebound followed across all markets. Notably, Japanese stock funds outperformed, while the largest asset class of the MPF—Hong Kong and Chinese stock funds—suffered the worst performance in April, declining by about 3.94%. Despite this downturn, these funds have risen around 7.54% since the start of the year.
The performance comparison between Hong Kong and Chinese stock funds and U.S. stock funds in 2025 reveals stark differences. The Hong Kong and Chinese stock funds achieved their seventh-best return in the first four months since the MPF’s inception, while U.S. stock funds reported a decline of approximately 6.21%, marking the fourth worst performance for the same period.
As of April 2025, the total assets of the MPF were estimated at about 1.333 trillion Hong Kong dollars, reflecting a monthly decrease of around 4.5 billion Hong Kong dollars but an increase of approximately 42.3 billion Hong Kong dollars since the beginning of the year. This represents the third-highest asset level since the MPF was established, translating to an average account balance of about 278,100 Hong Kong dollars per member. This figure reflects a decrease of about 900 Hong Kong dollars from March but an increase of about 8,800 Hong Kong dollars year-to-date.
Meanwhile, data from the Mandatory Provident Fund Schemes Authority indicates that the net asset value of the MPF exceeded 1.3 trillion Hong Kong dollars by the end of 2024. BCT Group reported that over 98% of designated scheme members enjoyed positive returns for the entire year, with an average return of 8.4%. However, the performance gap between two members was striking, with the "MPF King" achieving a return of 56.2%, while the "MPF Lamp God" suffered a loss of approximately -20.5%.
Interestingly, both members switched funds twice during the year, with their switching months coinciding. The "MPF King" adeptly navigated the market by transferring 100% of his U.S. stock funds to Hong Kong stock funds on January 30, 2024, when the Hang Seng Index had been hovering below 16,000 points for two weeks. Later, on October 2, 2024, he switched back to U.S. stock funds, capitalizing on the upward trend in the U.S. stock market.
In contrast, the "MPF Lamp God" transferred 83% of his Hong Kong stock funds and 17% of conservative funds to 100% Hong Kong stock funds on January 17, 2024. This decision came on a day when the Hong Kong market plummeted by 589 points, or 3.71%, marking a significant loss as it fell below the 15,000-point mark for the first time since late October 2022. On October 7, 2024, he again shifted his assets to Hong Kong stock funds, missing out on the U.S. market's rise from October to December.
As May begins, both the "MPF King" and the "MPF Lamp God" have concentrated their investments in a single market. However, BCT cautions that not all investors should place all their eggs in one basket. The MPF is intended as a long-term investment tool, and diversification is generally more effective and stable than attempting to predict market movements.
Despite the "MPF King" achieving an impressive 56.2% return with only two fund switches last year, some members frequently change their funds every few days. BCT emphasizes that the MPF is fundamentally a long-term investment tool and advises members to avoid excessive fund switching.
In addition, the Mandatory Provident Fund Schemes Authority recommends that members review their MPF investment portfolios every six months to a year. This practice helps assess asset accumulation progress, adjust strategies, and seize market opportunities. For those unfamiliar with investment markets, professional advice becomes crucial. BCT encourages members to utilize available tools and resources for market analysis and expert opinions, adopting a macro perspective on MPF investments.
As the MPF landscape evolves, members are reminded of the importance of strategic investment decisions, especially in a volatile market. The diverse experiences of members like the "MPF King" and the "MPF Lamp God" serve as valuable lessons in navigating the investment terrain. With careful planning and informed choices, MPF members can aim for a secure financial future.
