By Nick Hedley
Hong Kong’s Mandatory Provident Fund – the special
administrative region’s pension system – has lost 23.6% of its value so far
this year amid a steep sell-off in the region’s equity markets.
Research group MPF Ratings said in an update that by late
October, the system’s total investment losses for the year amounted to HK$286
billion (US$36.4 billion), or HK$62,400 (US$7,950) per member.
Total MPF assets were expected to end the month at about HK$942
billion (US$120 billion), a level last seen in May 2020.
And with Hong Kong’s equity markets now back at 2009 levels,
the MPF system is on track for its worst annual performance since 2008.
Hong Kong and Chinese equities are the MPF’s single-largest
asset class, according to Francis Chung, chairman of MPF Ratings. About 21% of
the system’s money is invested in local shares.
Chung said while account balances were sharply down, “the
accrued market losses are not a direct result of the MPF system.”
“The system does not control investment gains and losses,
rather it safeguards member assets operationally. MPF members can take confidence
in the system’s highly robust and highly secure environment.”
Diversified strategies were attractive in the current
environment, Chung said.