Mandatory Provident Fund schemes recorded a negative return of 0.9 percent in the first half of July, translating to an average loss of HK$3,302 per member, according to MPF rating agency GUM.
As of July 17, the market still maintains a positive year-to-date return of 4.7 percent, representing an average cumulative gain of HK$15,223 per person.
Among the three major asset categories, equity funds dropped 0.9 percent in July, but remain up 5.8 percent year-to-date. Mixed asset funds saw a larger dip, falling 1.5 percent during the month, though they still recorded a 5.7 percent cumulative gain for the year. Fixed income funds performed relatively steadily with a flat return in July, remaining up 0.6 percent year-to-date and continuing to stabilize portfolios amid market volatility.
"Deleveraging in South Korea and the escalation of the US-Iran conflict have weighed on AI trading activity, causing Asian equity funds to fall by 6.8 percent so far in July," said Christopher Lau Gar-hung, chief investment officer at GUM.
He added that the Hang Seng Index hit a new low for the year in June, making its overall price-to-earnings ratio lower than that of other major markets. This has attracted capital inflows and driven a rebound, with Hong Kong equity tracker funds rebounding by over 7.4 percent this month.
In response to the figures, the Mandatory Provident Fund Schemes Authority emphasized that MPF is a long-term investment spanning over 40 years, advising scheme members to diversify their investments to mitigate risks amid market volatility.
