2017 mpf performance · money market fund mpf conservative fund 23 equity fund mixed assets fund...

Mandatory Provident Fund Schemes Authority

8 February 2018

2017 MPF Performance

1

MPFhas added value to

members’ contributions

3

36.0 55.1

89.4 120.2

151.4

202.4

264.8

209.5

308.9

365.4 356.0

439.8

514.1

565.1 591.3

646.3

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

$ billion

MPF plays an important role in

retirement protection

Assets

22 Times

$843.5

billion

4

$13,000 $200,000

Late December 2001

MPF assets per member

increased to $200,000

Late December 2017

5

MPF has added value to

members’ contributions

Total assets:

$843.5 billion

Net returns:

$267.4 billion

Annualized

return:

4.8%

Annualized

inflation:

1.8%

-6.6%-8.5%

18.1%

8.4%6.2%

16.4% 16.8%

-30.2%

26.6%

7.8%

-11.3%

12.4%

7.4%

1.5%

-3.6%

0.9%

22.3%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Highest return

2nd highest

Financial tsunami

6

MPF yearly investment returns

Market conditions affect

investment return

$197.2 billion

7

MPF overall returns

#Up to December 2017

System’s returnsreflect members’ collective

choices and market

conditions

69%

18%

13%

Equities

Bonds

Deposits & Cash

Asset allocation as at 30 September 2017

9

Overall return reflects

members’ collective choices

Equities account for 69%

of MPF assets

Fund typeRisk

Level

Return

in 2017

Dec 2000 to Dec 2017

Annualized

return

Cumulative

return

Equity Fund High 34.4% 5.5% 147.7%

Mixed Assets Fund Medium to High 22.3% 4.6% 117.3%

Bond Fund Medium to Low 4.8% 2.7% 58.9%

Guaranteed Fund Low 3.0% 1.2% 23.4%

Money Market Fund(non MPF Conservative Fund)

Low 2.5% 0.6% 10.3%

Money Market Fund(MPF Conservative Fund)

Low 0.1% 0.7% 13.0%

10

Risk levels and returns of different fund types

11

Equity

Fund

Mixed Assets

Fund

Bond

Fund

Guaranteed

Fund

Money Market Fund

(MPF Conservative

Fund)

Money Market

Fund (Non MPF

Conservative Fund)

Volatility reflects risk level

Month

ly R

eturn

Highest and Lowest Monthly Returns of MPF Funds (December 2000 – December 2017)

Highest monthly return Lowest monthly return

Fund Category Return in 2017

Dec 2000 to Dec 2017

Annualized

return

Cumulative

return

Hong Kong equity 40.7% 7.4% 241.0%

China equity 40.3% N/A# N/A#

Hong Kong equity

(index tracking)39.3% 6.1% 174.8%

Asia equity 35.2% 7.6% 251.4%

Japan equity 24.3% 1.9% 37.4%

Global equity 22.4% 3.5% 78.9%

Europe equity 20.9% 1.7% 34.0%

US equity 19.5% 3.0% 64.5%

# Data not available as no equity funds were classified as China equity funds as at 1 December 2000.12

Returns of fundsof the same type vary

A member’s returndepends on

his investment choices

Total contributions

in 17 years$318,000 $318,000 $318,000

Member A Member B Member C

Investment choiceHong Kong

Equity Fund

Mixed Assets

Fund

MPF Conservative

Fund

14

Risk level High Medium to High Low

The monthly contribution of each scheme member is $1,550, inclusive of the employer’s and the

member’s contributions

Examples

15

0

100

200

300

400

500

600

700

800

MPF assets ($’000)

A: $702,000

B: $518,000

C: $329,000

Total contributions:

$318,000

Examples

Default Investment

StrategyA retirement investment strategy

balancing long-term risk

and return

17

80%

60%

40%

20%

Default Investment Strategy -

automatic de-risking

Core Accumulation

Fund

Age 65 Plus

Fund

Lower risk

assets

(mainly

global

bonds)

Higher

risk

assets

(mainly

global

equities)

DIS：Mixed assets funds

80%

50 - 64 65+18 - 49Age

Do not time the market

Review MPF investment regularly

18

Investment tips

19

• Enhance transparency of MPF funds

• Help scheme members get key information conveniently

20

Objectives

website：https://fpp.mpfa.org.hk/

21

Features

• One-stop information platform

• Three interactive sections

Fund size Launch date

LatestFund Expense

Ratio

Annualized returns covering

different periods

Cumulativereturn

Fund riskindicator

22

Comprehensive

fund information

Guaranteed

Fund

Money Market

Fund

MPF

Conservative

Fund

23

Equity

Fund

Mixed Assets

FundBond Fund

• On equity content

• 7 sub-groups, e.g.

– 81% to100% equity

– 21% to 40% equity

• On geographical allocation

or currency exposure

• 5 sub-groups, e.g.

– RMB bond funds

– Hong Kong dollar bond

funds

• On geographical

allocation

• 10 sub-groups, e.g.

– Asia equity funds

– Global equity funds

Six major MPF fund types

Compare with

the same type of funds

24

Demonstration

MPF has added value to members’ contributions

Fund Performance Platform helps members review funds from different perspectives

Members should take care of their MPF

25

Closing remarks

26

Take an active

approach

to your

retirement

investment