Mandatory Provident Fund (MPF) members are expected to earn HK$22,869 ($2,940) each on average year-to-date until Dec 27, marking the highest gain since 2020, as global markets continue to grow despite numerous uncertainties, according to MPF consultant GUM.
GUM on Friday estimated an average investment return of some 9 percent logged in the compulsory pension fund program for the whole of 2024, with all three major asset class indices — equity, mixed asset, and fixed income — recording positive returns.
The equity fund index led the performance by a growth of more than 10 percent. Funds tracking the US stock market had the best performance, with a year-on-year increase of 23.3 percent, followed by those focusing on the Japan, Hong Kong and China stock markets. The smallest increase was from MSCI Europe Index, up 5.8 percent year-on-year.
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Martin Wan, GUM’s strategy and investment analyst, pointed out that US equity funds have outperformed all other equity fund categories, as they have attracted the most capital of the MPF, amounting to HK$ 17.8 billion.
Looking to the future, Michael Chan, GUM’s managing director, estimated this upward trend will continue into the first quarter of 2025.
“This year, global markets will be influenced by US president-elect Trump’s policies, with geopolitical issues and tariffs affecting the investment climate. For China, it is believed that the central government’s policies will become more proactive and effective to maintain stable economic growth,” Chan said.
China’s policies include a more proactive fiscal policy and a moderately loose monetary policy proposed in December and a special 10 trillion yuan ($1.36 trillion) debt package announced in November. Due to these policy changes, the consultant anticipated China’s GDP growth rate in the fourth quarter would reach 5.4 to 5.5, which will positively influence Hong Kong’s market. He recommended that investors who can bear medium and high risks should seize the opportunities in these markets next year.
Elsewhere, Chan said he is optimistic about US stocks but not European stocks. He said he believes Trump’s return to the White House and the upcoming fourth Federal rate cut, along with other possible changes, would boost the US economy in the short term.
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He also warned that investors should avoid concentrating their investments in a single market, saying low-risk members might consider conservative funds to secure stable returns.
Contact the writer at thor_wu@chinadailyhk.com
