MPF returned 7.15% in 2010, beating the Hang Seng Index; average worker gained nearly HK$9,000

A new year, time to tally workers’ MPF gains. Thomson Reuters Lipper data shows MPF returns of 7.15% over the past year — beating the Hang Seng Index’s 5.3% rise. Over the past decade, the MPF is up 48.47% overall, and last year’s gain put nearly HK$9,000 in the average worker’s pocket.

Which fund types did best?

Up 2.7% last month; target-date funds led with 4.73%. The MPF bounced back 2.7% last month, with 154 constituent funds averaging 4.12%. Equities were unremarkable, though: Hong Kong and mainland equity categories fell 0.62% and 0.17% month on month, hit by mainland inflation and monetary tightening. Among mixed-asset funds, the target-date category shone with a 4.73% monthly gain.

How much is in the average account?

HK$125,000 — earning HK$8,933.70 each last year. With MPF assets of about HK$308.87 billion and 2.472 million workers at end-2009, the average account held HK$124,947.40, earning HK$8,933.70 each. The best year on record was 2009 (+25.79%); the worst was 2008’s financial-crisis plunge (-25.99%) — though Lipper’s Hong Kong research head Billy Wong cautions 2009’s rebound was “hot air”, flattered by 2008’s shrunken base.

What is the outlook this year?

Experts favour emerging markets; Southeast Asia top-ups suggested. Wong stays bullish: low rates and ample liquidity should sustain the bull run, with corporate earnings supporting 10%–15% average gains, especially in emerging markets. iFund’s Vivian Siu suggests adding Southeast Asia funds; JPMorgan’s Yeung Wing-sze recommends workers a decade or more from retirement stay in equity or mixed-asset funds, particularly mainland and Hong Kong equities.

To track mpf fund performance trends, visit MPF fund comparison.