Asia-Pacific Equities Led 2012’s First Nine Months at 14.38% — HK$11,152 per Worker

This article is a rewrite of a report from October 2012.

In the third quarter of 2012, coordinated easing by European and US central banks lifted MPF fund performance: 4.66% for the quarter, 8.06% for the first nine months. Asia-Pacific ex-Japan equities led at 14.38%; the average worker made about HK$11,152. In MPF comparison, the winner was not the broad market — it was Asia-Pacific.

Which region led?

Asia-Pacific ex-Japan, up 14.38% over nine months. September alone saw all MPF equity funds gain 4.73% on average; over nine months equities rose 11.19% and mixed-asset funds 8.38%. Asia-Pacific ex-Japan gained 5.64% in September and 14.38% over nine months — the strongest category. Hong Kong and China equities rose 6.73% and 6.38% in September; over nine months Hong Kong funds gained 12.55% while China funds managed just 4.01%.

How much per worker?

HK$11,152. Based on HK$356.035 billion in total net MPF assets at end-2011 across 2.573 million employees and self-employed (excluding 2012’s new contributions), the average nine-month gain was about HK$11,152 per person.

What to watch in Q4?

Three variables: Spain, the US election, the fiscal cliff. Lipper’s Hong Kong research head warned that Spain’s debt, the US presidential election and America’s “fiscal cliff” would add equity volatility — the fiscal cliff the biggest risk.

What is the lesson from 2012?

Regional allocation decided returns. In 2012’s first nine months, Asia-Pacific equities beat Hong Kong, and China trailed — same market, wildly different outcomes by region. For members picking funds, “equity fund” is not enough; the regional mix is what matters.