MPF fund performance in July: equity funds lagged bonds, but each worker still made $270

After two straight months of losses, Hong Kong MPF saw a modest “mini spring” last month, though equities kept trailing bonds. Lipper Hong Kong data: July MPF averaged +0.18%, with equities down 0.24% and bonds up 1.22%.

How much did each worker make?

On MPFA asset figures to end-March, July’s MPF earned about $680 million — roughly $270 per worker. European equities crashed over 4%, North American equities fell 1.78%; but Hong Kong and Greater China equities, each down over 4% in June, bounced 0.15% and 1.03% in July to stop the bleeding. Japan equities added 2.71% after June’s 1.1%+ gain — last month’s best asset.

Which assets are still underwater this year?

For the first seven months, MPF averaged +1.58%; equities +0.95%, bonds +4.42%. The popular Hong Kong, Greater China and China equities are the only three equity classes still below water — Hong Kong equities, at -1.55%, furthest from “home”.

What do experts see ahead?

An investment research director at the asset manager is mildly bullish for the next three months: markets have overcorrected, and better-than-expected corporate results favour Hong Kong equities outperforming this month; signs of mainland inflation peaking would help further. Money will keep flowing to growing Asia — now may be the time to accumulate Asia-Pacific ex-Japan equity funds.

The consultancy’s MPF advisory managing director Ms Siu agrees equity funds remain attractive: investors with horizons of five years or more can gradually rotate bonds into heavier equity weightings. But she cautions China-equity investors not to expect huge H2 gains — if mainland inflation stays hot and tightening continues, Hong Kong stocks torn between China and the US could stay volatile.

To track MPF return trends, visit MPF fund comparison.