Hong Kong Mandatory Provident Fund Total AUM at $139 Billion in September 2023, Equity Funds & Mixed Assets Funds Accounted for 80% of $139 Billion, Annualized Return of Equity Funds +3.6% & Mixed Assets Funds +3.5%
7th Dec 2023 | Hong Kong
The Hong Kong Mandatory Provident Fund (MPF) total AUM (Assets under Management) is at $139 billion (HKD 1.09 trillion) in September 2023, with equity funds & mixed assets funds accounting for 80% of the $139 billion AUM. The annualized return of equity funds is +3.6% and mixed assets funds is +3.5%. MPF Schemes Authority: “As at the end of September 2023, total MPF assets amounted to HKD 1,090 billion, increasing by 123% over the past 10 years. $210 billion of the total MPF assets was investment returns, net of fees and charges. Since the inception of the MPF System in 2000, MPF equity funds and mixed assets funds, which accounted for nearly 80% of the total net asset value of MPF, registered on average an annualized net return of 3.6% and 3.5% respectively, exceeding the annualized inflation of 1.8% for the same period. The cumulative net returns of MPF equity funds and mixed assets funds were 125% and 117% respectively. Total MPF contributions amounted to HKD 21.31 billion in the third quarter of 2023, of which HKD 16.43 billion (77%) was mandatory contributions and HKD 4.88 billion (23%) was voluntary contributions. As at the end of September 2023, there were 3.05 million MPF accounts investing all or part of their assets according to the default investment strategy (DIS) or in the two constituent funds under the DIS, accounting for 28% of the total number of 11.01 million MPF accounts at the time. The total assets invested amounted to HKD 94.7 billion, accounting for 9% of total MPF assets. As at 30 September 2023, the total amount of tax-deductible voluntary contributions (TVC) received was HKD 9.2 billion. The number of TVC accounts was 70 000, reflecting a year-on-year growth of 10%. The number of claims for MPF on the grounds of permanent departure (PD) from Hong Kong in the third quarter of 2023 was 8 700, on a par with the same quarter last year and 7% lower than that in the same quarter of 2021. The number of PD claims fluctuated from time to time. Since a scheme member may have more than one account under the MPF System and would make individual claims with the relevant trustees to withdraw his/her MPF from these accounts, the number of claimants involved would be less than the number of claims. In addition, PD claimants may not be emigrants as such claimants also include those returning to their places of origin (e.g. non-local employees who have completed their employment in Hong Kong) or moving to reside in the Mainland.”
“ Hong Kong Mandatory Provident Fund Total AUM at $139 Billion in September 2023, Equity Funds & Mixed Assets Funds Accounted for 80% of $139 Billion, Annualized Return of Equity Funds +3.6% & Mixed Assets Funds +3.5% “
MPF System
The MPF System is set up to help Hong Kong’s workforce save up for their retirement. It is an important part of Hong Kong’s retirement protection framework. The Mandatory Provident Fund Schemes Ordinance (MPFSO) was enacted in 1995 and supplemented by subsidiary legislation in 1998, 1999 and 2000 respectively. The MPF System was launched in December 2000.
- An MPF conservative fund is a type of money market fund. It invests exclusively in Hong Kong-dollar assets, either in short-term bank deposits or short-term bonds. Even though an MPF conservative fund is considered a low-risk investment product, it is not principal-protected.
- A mixed assets fund invests primarily in a mix of bonds and equities. Mixed assets funds have different risk levels, depending on the allocation between equities and bonds.
- An equity fund primarily invests in stocks traded on approved stock exchanges and seeks a higher rate of return through capital appreciation of shares.
Default Investment Strategy (DIS) is a ready-made investment solution, made up of two mixed assets funds, namely the Core Accumulation Fund (CAF) and the Age 65 Plus Fund (A65F). If scheme members have not specified a fund choice on their enrolment forms, their trustees will invest their contributions automatically according to the Default Investment Strategy (DIS). Members can also choose to invest their MPF benefits either according to DIS or in individual funds under DIS.
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