The 4.75 million members of Hong Kong’s Mandatory Provident Fund (MPF) have enjoyed a 13 percent increase in their pension assets in 2024 thanks to the best investment performance in four years.
The MPF earned a combined HK$102.4 billion (US$13 billion) last year, equivalent to HK$21,500 for each member, according to data from MPF Ratings, an independent research firm.
The 379 MPF investment funds generated an average return of 8.8 percent for the year, compared to a gain of 3.5 percent in 2023 and a loss of 15.7 percent in 2022. This is the best annual return from a gain of 11.4 percent in 2020. .
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The strong results boosted the MPF’s total assets to HK$1.29 trillion. The sum, which takes into account investment earnings and new contributions from members, is HK$271,500 per member. This is 13 percent higher than a year earlier, indicating an average portfolio increase of HK$31,600 per member.
Pedestrians walk on a pedestrian bridge during lunchtime in Central on August 16, 2024. Photo: Xiaomei Chen alt=Pedestrians walk on a pedestrian bridge during lunchtime in Central on August 16 August 2024. Photo: Xiaomei Chen>
“2024 has been a productive year for investors,” said Mark Konyn, chief investment officer of AIA, one of the main providers of MPF. “Reduced inflation and positive overall incomes have supported the growth of retirement savings.”
The MPF’s strong performance last year shows the benefits of the pension scheme, said Cheng Yan-chee, director general of the Mandatory Provident Fund Schemes Authority.
“MPF’s performance reflects its resilience and stability over the years,” Cheng said. “Members of the MPF scheme are encouraged to make use of the merits of the MPF system which provides funds in various markets and asset classes, review their MPF investments regularly and build a diversified investment portfolio to mitigate risks investment”.
He urged members to take a long-term view of their MPF investments because they will only need it decades later when they retire.
“Members of the MPF scheme should not view the MPF from a short-term investment perspective, nor try to time the market, as this could lead to losses from buying high and selling low,” he added. .
Established in 2000, Hong Kong’s MPF is a mandatory pension scheme that collects monthly contributions from employers and employees, representing up to 5 percent of the employee’s monthly salary.
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2025-01-06 09:30:00
