Year of the Tiger: MPF members can expect a rebound in Chinese and Hong Kong stocks to boost pension pot, analysts say
- The 400-odd funds under the MPF scheme are poised to lose about 4 per cent in the Year of the Ox, the first retreat since the Year of the Dog in 2018
- The last Year of the Tiger in 2010 provided a strong return of 11.6 per cent on average for MPF funds
With MPF participants investing one-third of their HK$1.2 trillion (US$148.49 billion) assets in Hong Kong and China stock funds, the performance of equity markets are vital to their pension fund returns.
“As we enter the Year of Tiger, we are cautiously optimistic on the China A-share market,” said Philip Tso, head of institutional business for Asia-Pacific at Allianz Global Investors, which manages €45 billion (US$50.9 billion) of assets in the region. “We expect high single digits earnings growth and an increasingly supportive environment for market valuations.”
The last Year of the Tiger in 2010 saw the 400-odd MPF funds provide average returns of 11.6 per cent, the sixth best lunar year in the 21-year of history of the MPF. The funds are poised to lose about 4 per cent in the Year of the Ox ending on January 31, according to data from MPF Ratings, an independent pension research firm. This would be the first losing lunar year for the MPF since the Year of the Dog in 2018 when the MPF funds lost 7.8 per cent on average.
The worst on record was the Year of the Rat in 2008 when the MPF funds lost 24.9 per cent amid the global financial crisis, while the best was the Year of the Ox that followed in 2009 when the market bounced back giving returns of 27.3 per cent.
