The Mandatory Provident Fund (MPF) Ratings Agency announced today (Feb. 5) that the MPF recorded positive returns in January, with an investment return of approximately 1.61% across all fund performance indices.
In monetary terms, this translates to about HK$20.8 billion in investment gains, averaging around HK$4,400 for each of the 4.75 million MPF members.
In terms of fund performance, non-Asian equity funds led in January, with U.S. equity funds rising by 3.65% and European equity funds increasing by 5.56%.
Historical data shows that in the past 13 instances where the MPF achieved positive returns in January, 8 of those years ended with positive returns for the entire year, with an average annual return rate of about 12%. However, Francis Chung, Executive Chairman of MPF Ratings, cautioned that the U.S. equity funds have recorded over 20% returns for two consecutive years, a situation not seen in the last 30 years, making U.S. stocks expensive. Coupled with the threat of confrontational tariffs from President Trump, even though historical data suggests a strong year after positive January returns, 2025 may not be smooth sailing.
Regarding the impact of tariffs, Chung advised MPF members to prepare for a volatile market. If tariffs are passed on to consumers through higher prices, it could lead to inflation. Importers may absorb the tariffs, but this could reduce profits and potentially lead to unemployment. Additionally, countries might adopt their measures to counteract tariffs, which could harm the global economy.
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