MPF returns forecast to rise 8pc for year

Victor Zhong

Gain Miles expects overall mandatory provident fund returns in 2021 to range between 6 and 8 percent - higher than a previous forecast of 4 to 5 percent - mainly due to expectations the Hang Seng Index will rise above the 30,000-point level.

This came as MPFs outperformed the Hang Seng Index, which registered an annual drop of 3.4 percent in 2020 the first time in 20 years, said Michael Chan, managing director at Gain Miles.

The mandatory provident fund consultancy is optimistic about greater returns in Greater China and US stocks as central banks are expected to continue with quantitative easing.

Meanwhile, the mainland economy is expected to grow by 8 to 10 percent this year given the pandemic in China is under control - which is conducive to the success of Chinese stocks, said Gain Miles.

Overall, MPFs saw an 11.8 percent return last year, reflecting an average gain of HK$26,920 per investor. This annual return has reached a double-digit return for two years in a row.

The equity funds indicator rose nearly 5 percent and the mixed assets funds indicator rose 3.8 percent month on month, while the fixed-income funds indicator rose 0.3 percent.

The average return for MPFs in December was 3.4 percent, according to the MPF performance index by Gain Miles. Each investor earned an average of HK$8,267 in December.

The growth was primarily due to an improved investment climate resulting from the rollout of Covid-19 vaccines.

Equity funds were the top performer, with overall returns of 15.7 percent. Mixed assets funds saw returns of 13.2 percent, while fixed-income funds only recorded 2.7 percent returns.

In other news, the cancelation of the MPF offsetting mechanism and the extension of statutory holidays will be on the agenda for next year, said Secretary for Labour and Welfare Law Chi-kwong yesterday, reassuring contributors.