2023 first quarter MPF Fund Performance Review
Global market rebound kept the momentum in the first quarter of 2023. According to MPF Ratings, MPF funds rose an average of about 4.06% in Q1 2023 despite multiple banking crises in Europe and the US.
While government officials were quick to rescue failing banks and provide liquidity to avoid potential disasters, geopolitical conflicts did not worsen and US inflation data seems to be under control, reducing the expectations for further interest rate hike and boosted equities and bonds. China economy also resumed growth in 1Q 2023 after its reopening. All these provided fuel for the markets.
In 1Q 2023, all MPF equity, bond and mixed assets funds were all in positive territories and the following is a snapshot of near, intermediate and long term performance of some popular MPF fund categories from market-leading MPF providers:
Among equity fund categories, Hong Kong and China equity funds went up less than both US and international funds in the first quarter 2023, outperformed in 1-year term but lagged behind in 5 and 10-year terms.
International equity funds continue to be a good choice if you are looking for growth and have a long term horizon as they offer diversification across countries and industry sectors instead of putting all eggs in one basket.
If you would like further asset diversification by increasing allocation of bond, the core accumulation fund category is a good option. It is the more aggressive one of the 2 funds made up of the default investment strategy (DIS) and its near and intermediate term performance has also been decent. With a 60/40 split in equity/bond asset and low fund expense ratio of less than 1%, it offers a good balance of risk and return and global diversification.
In the MPF and investment world, high fund management fees will not guarantee better performance and low fees leave more capital to work for you and may provide better odds to outperform in the long run. Some of these global equity funds and all core accumulation funds offer low total expense ratios (less than 1%). Beside fund costs, MPF members can also periodically review and consolidate own portfolio allocations according to the investment objectives, timeframe and risk tolerance levels.
Please contact us if you want more information about the fund choices from various MPF trustees.
Last Update: 28th April 2023