2023 Third Quarter MPF Fund Performance Review
Global markets fell in the Q3 2023 due to expectations of further interest rate increase by the FED and ongoing concerns with the Chinese property markets and economy recovery. US inflation remains above the 2% threshold and expectations that interest rate will remain at an elevated level for a longer period suppressed the US and global markets. MPF funds collectively gave up all its year-to-date gains in Q3 2023.
In Q3 2023, Hong Kong and China MPF funds fell further back in negative territories while other equity and mixed assets funds gave up some of their year-to-date gains. 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 equity funds fell by about the same amount in the third quarter of 2023, and the year to date performance gap between HK/China and international/US remains at about 15-20%.
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: 13th November 2023