Returns will fall to 4.5pc, MPF investors warned

Business | Kevin Xu 8 Jan 2020

Wealth management consultant Gain Miles expects the average return of the Mandatory Provident Fund to fall to 4.5 percent this year from 12.7 percent last year, due to geopolitical uncertainties such as the Sino-US trade war, Brexit and US-Iran conflict.

Each investor of the MPF gained an average HK$6,921 in December, or a return of 3.23 percent in the month, according to Gain Miles.

Overall MPF funds booked a 12.7 percent return last year, reflecting an average gain of HK$24,441 per investor.

Over the past year, equity funds were the top performer with a return of 16.93 percent, while mixed assets funds gained by 14.82 percent and fixed-income funds by 2.11 percent. Within the equity sector, the US equity fund recorded 27.21 percent returns last year followed by the Global equity fund, which saw a 23.69 percent return.

The average return last month was calculated based on the MPF's total asset value of HK$214,271 per investor as of the end of November.

Meanwhile, the benchmark Hang Seng Index picked up by 0.34 percent, or 95.87 points at 28,322 yesterday, while gold and oil retreated.

Gold prices erased early losses and inched up as fears of widespread conflict between the United States and Iran persisted, while palladium scaled a new high. Spot gold rose 0.2 percent to US$1,569.27 (HK$12,240.31) per ounce by 15:41 after falling as much as 0.7 percent earlier in the session, its biggest daily percentage decline in about a month. In the previous session, prices had touched US$1,582.59, the highest since April 2013.

Horace Chow, vice president of cross-asset listed distribution sales at Societe Generale, expects the number of warrants and callable bull or bear contracts on Chinese internet giants listed in Hong Kong to surge by 70 percent this year.

Chow also predicts the turnover in the CBBC market will hit a new high this year to around HK$2.3 trillion and that the turnover of warrants will reach HK$5 trillion.

Keith Chan, head of cross-asset listed distribution at SocGen, said inline warrants on Alibaba (9988) are likely to be issued if they are actively traded.

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