All fund types see positive returns since inception of MPF 25 years ago, regulator says

All fund types recorded positive annualized investment returns since the inception of the Mandatory Provident Fund System 25 years ago, Hong Kong’s pension fund regulator said. 

Equity funds and mixed assets funds, together accounting for 80 percent of total MPF assets, have, on average, recorded cumulative net returns of 240 percent and 200 percent, or annualized net returns of 5 percent and 4.5 percent, respectively, both exceeding the annualized inflation rate of 1.8 percent for the same period, said the Mandatory Provident Fund Schemes Authority chair Ayesha Macpherson Lau.

Thanks to the concerted efforts of both employers and employees, MPF total assets have grown to HK$1.5 trillion, with a year-to-date net investment return of about 15 percent, Lau wrote in her blog on Tuesday. 

She added that the core accumulation fund under the default investment strategy (DIS, “funds for lazy people”), has recorded, on average, an annualized net return of 6.9 percent.

December 1 marked the 25th anniversary of the MPF System.  

Before the implementation of MPF, only about one-third of Hong Kong’s workforce had some form of retirement protection, Lau noted, adding that with the implementation of MPF System, nearly 100 percent of the workforce is now covered by retirement protection.