Consultant expects MPF to bounce back

Wealth consultancy Gain Miles expects each Mandatory Provident Fund member to enjoy a 5 to 7 percent gain this year, reversing the 0.3 percent, or HK$807, loss on average last year.

The estimation is quite conservative, given that the economic recovery in the eurozone and the United States continues to be on track and another wave of lockdowns there is unlikely for the rest of the year, said director Michael Chan Yui-lung.

He said the under-performed Hong Kong stock market may rebound this year, driven by China's stable economic growth and easing monetary policies.

But the overall performance across all markets may not be as strong as last year and more volatilities are expected due to high inflation and the incoming interest rate increases, Chan said.

North America Equity Funds led all the equity funds in 2021, with a gain of 25.5 percent, whereas Hong Kong Equity Funds stayed at the bottom with a 14.4 percent loss, said Gain Miles.

Many wage earners prefer conservative investment funds but Chan suggested that young people may consider switching to more aggressive investment funds to avoid lagging behind inflation if they can accept higher risks.

Chan said the government's plan to allow MPF to invest in China's national debts will provide more choices for low-risk investors in the future. Bonds denominated in yuan performed well last year.

The top five MPF providers for market share were still Manulife, HSBC, Sun Life, AIA and BOC-Prudential in 2021 and the Manulife Global Select (MPF) Scheme was the best performer among the 26 MPF schemes, with a return of 2.4 percent, while the worst Invesco Strategic MPF Scheme had a negative return of 4.8 percent, Gain Miles said.