MPF members lose average HK$8,677 in October, GUM says
Hong Kong's Mandatory Provident Fund fell 2.6 per cent in October, with average member losses of HK$8,677. Year-to-date gains remain positive at HK$11,610 per member. GUM cited a tech stock sell-off driven by AI capital spending concerns and weak mainland demand.
The Mandatory Provident Fund fell overall in October, with an average loss of HK$8,677 per member, while the year-to-date average gain per member stood at HK$11,610, according to the MPF rating agency GUM.
The GUM MPF Composite Index fell 2.6 per cent to 296.4 points. The Equity Fund Index dropped 4.0 per cent to 427.9 points, and the Mixed Asset Fund Index slipped 2.2 per cent to 300.7 points. Meanwhile, the Fixed Income Fund Index bucked the trend to rise 0.4 per cent to 133.9 points.
"MPF has fallen for two consecutive months, with October's decline the largest since March, but the average member is still up more than HK$11,000 year to date," said GUM chief investment officer Christopher Lau Gar-hung.
Lau pointed out that concerns over massive artificial intelligence capital spending not delivering commensurate returns triggered a sharp sell-off in global technology stocks. Tech-heavy Asian markets suffered the heaviest blows. Greater China equity funds plunged 9.8 per cent, and Asian equity funds dropped 8.2 per cent. South Korean equities tumbled more than 16 per cent during the month.
Mainland equities were also weighed down by weak domestic demand and fading stimulus expectations, with the China Securities Index 300 recording its largest monthly decline in over a decade. Hong Kong equity funds and index-tracking versions fell 7.6 per cent and 5.4 per cent respectively, as the Hang Seng Index declined for a third straight month, widening their year-to-date losses to 11.2 per cent and 8.1 per cent.
By contrast, capital flowed into defensive sectors as US healthcare stocks hit record highs. Other equity funds, which mainly comprise healthcare assets, rose 8.6 per cent to become the best-performing equity category of the month. Japanese equity funds led the year-to-date rankings with a 19.3 per cent gain.
Fixed income funds provided a crucial cushion as bond prices rose alongside falling yields. Global bond funds rose 1.5 per cent to lead the fixed income sector. Looking ahead to November, Lau noted that volatility will persist in the near term. Key events including the US midterm elections, the Federal Reserve's December meeting, and upcoming tech company earnings will continue to sway markets.
