The Mandatory Provident Fund fell overall in October, with an average loss of HK$8,677 per member, while the year-to-date average gain per member stood at HK$11,610, according to the MPF rating agency GUM.
The GUM MPF Composite Index fell 2.6 percent to 296.4 points. The Equity Fund Index dropped 4.0 percent to 427.9 points, and the Mixed Asset Fund Index slipped 2.2 percent to 300.7 points. Meanwhile, the Fixed Income Fund Index bucked the trend to rise 0.4 percent to 133.9 points.
"MPF has fallen for two consecutive months, with October's decline the largest since March, but the average member is still up more than HK$11,000 year to date," said GUM chief investment officer Christopher Lau Gar-hung.
Lau pointed out that concerns over massive artificial intelligence capital spending not delivering commensurate returns triggered a sharp sell-off in global technology stocks.
Tech-heavy Asian markets suffered the heaviest blows. Greater China equity funds plunged 9.8 percent, and Asian equity funds dropped 8.2 percent. South Korean equities tumbled more than 16 percent during the month.
Mainland equities were also weighed down by weak domestic demand and fading stimulus expectations, with the China Securities Index 300 recording its largest monthly decline in over a decade.
Hong Kong equity funds and index-tracking versions fell 7.6 percent and 5.4 percent respectively, as the Hang Seng Index declined for a third straight month, widening their year-to-date losses to 11.2 percent and 8.1 percent.
By contrast, capital flowed into defensive sectors as US healthcare stocks hit record highs.
Other equity funds, which mainly comprise healthcare assets, rose 8.6 percent to become the best-performing equity category of the month. Japanese equity funds led the year-to-date rankings with a 19.3 percent gain.
Fixed income funds provided a crucial cushion as bond prices rose alongside falling yields. The 10-year US Treasury yield climbed to 5.31 percent early in October, marking the highest level since 2007, before sliding back to 4.94 percent by month-end amid safe-haven demand triggered by tech stock sell-offs and geopolitical tensions.
This marked the largest monthly yield decline since December 2023.
Global bond funds rose 1.5 percent to lead the fixed income sector, while Hong Kong dollar bond funds and Asian bond funds both gained 1.3 percent. Chinese yuan bond funds rose 0.4 percent for the month and maintained their position as the top fixed income category year to date with a 6.2 percent return.
Among mixed asset funds, the Default Investment Strategy Age 65 Plus Fund gained 0.6 percent, serving as the only positive category in the segment due to its heavy lower-risk bond allocation. The Default Investment Strategy Core Accumulation Fund fell just 0.9 percent, maintaining the highest year-to-date return among mixed assets at 6.3 percent.
Looking ahead to November, Lau noted that volatility will persist in the near term. Key events including the US midterm elections, the Federal Reserve’s December meeting, and upcoming tech company earnings will continue to sway markets.
