2023 second quarter MPF Fund Performance Review
Despite the continuing rebound of global markets, MPF funds collectively lost about 0.95% in Q2 2023 but are still up 3.07% for the first half of 2023 according to MPF Ratings.
US inflation data continues to show signs of being under control and investors expect we are near the end of the rate-hike cycle which fuels the US market despite continuing geopolitical conflicts in Ukraine. However, concerns of growth prospects with China economy persisted in Q2 and the China and HK markets bucked the trend and dropped.
In Q2 2023, almost all of MPF Hong Kong and China funds fell back in negative territories while most other equity, and mixed assets funds rose further in positive territories. 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, most Hong Kong and China equity funds fell while most US and international funds rose in the second quarter 2023, as the year to date performance gap widened to about 20% between them.
As it is difficult to predict market performance, 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: 31st July 2023