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Convoy MPF Composite Index recorded a slight decrease in May
Good performance in US Equity Funds while weak performance in Bond Funds

(11 Jun 2018 – Hong Kong) As of 31 May, the Convoy MPF Composite Index reported 238.31, with a decrease of 0.13% on a monthly basis. The Convoy MPF Equity Index dropped by 0.26% to 261.87 month-on-month while the Convoy MPF Bond Index recorded a fall of 0.48% to 153.61 month-on-month. According to MPFA’s announcement, the number of MPF scheme members as of December 2016 was 4.19 million. Each employee lost an average of $260.37 in May 2018 but earned an average of $1525.3 from January-to-date.

 

In light of the joint announcement after the trade discussion between China and the US, the market eased its concern on the trade war and focused on the basic factors again.  As a result, the business performance of Apple Inc. in April became the market focus. The revenue and net profits of iPhone reached record high, stimulating its stock price to increase more than 10%. It boosted the stocks of the technology sector and US stock funds increased by 2.07% last month. Besides, the unemployment rate of the US further dropped, which increases the likelihood of interest rate hikes and stimulates US Dollars to increase significantly. The strong US Dollar is causing sell pressures to new markets. The equity funds of the Asian market (except Japan) are dragged down this month, resulting in a month-on-month decrease rate of 1.10%. On the other hand, the market performance of bond funds remains in the doldrums. The continuous high interest rate and inflation expectation have caused pressure on global bond funds, resulting in a month-on-month decrease rate of 0.92%.

 

Kenrick Chung, Director of Product Management of Convoy Financial Services Limited, said that the market volatility is gradually increasing due to a number of reasons: the higher risk of geopolitics in Europe, the continuous trade war between the US and China, and the anticipation of interest rate hikes. MPF scheme members should be more cautious in risk management. In the long run, the economic development of China will continue to strive. It is recommended that scheme members with higher risk tolerance for investment may use the cost average method to consider investing in China's equity funds on a monthly basis. Regarding bond funds, scheme members should be aware of the impact that the increasing interest rates may bring on bond stock prices. If members wish to avoid risks, they may consider investing in MPF Conservative Funds and Guaranteed Funds. However, attention should be paid to the warranty terms in the guarantee fund.

 

Summary of Performance of MPF Key Funds Class in May:

  • Equity Funds:
    • US Equity Funds performed well relatively with an increase of 2.07% month-on-month, a 2.33% increase January-to-date
    • European Equity Funds performed the worst, recorded a 2.67% decrease month-on-month and a 1.39% decrease January-to-date
  • Bonds Funds:
  • Hong Kong Bond Funds performed well relatively, slightly up by 0.49% month-on-month and decreased by 1.30% January-to-date
  • Global Bond Funds performed the worst, recorded a decrease of 0.92% month-on-month and a decrease of 1.11% January-to-date
  • Default Investment Strategy:
  • The Core Accumulation Funds of the DIS raised by 0.19% month-on-month, up by 0.23% January -to-date
  • The Age 65 Plus Funds of the DIS increased by 0.06%, up by 0.36% January -to-date

 

Convoy MPF Index Trend

  • SOURCE: CONVOY FUND RESEARCH DEPARTMENT, WEBSITE OF MPFA AND THOMSON REUTERS LIPPER
  • COMPILED BY THE CONVOY FUND RESEARCH DEPARTMENT
  • DISCLAIMER: THE CONTENT IS FOR REFERENCE ONLY AND DOES NOT CONSTITUTE ANY SUGGESTION AND OFFER FOR INVESTMENT. PLEASE DO NOT RELY ON THIS ARTICLE FOR YOUR INVESTMENT DECISION. INVESTMENT INVOLVES ELEMENTS OF RISK AND THE HISTORICAL DATA OF THE FUNDSS IS NOT NECESSARILY AN INDICATOR OF THEIR FUTURE PERFORMANCE. CONVOY ASSET MANAGEMENT LIMITED ("CONVOY") HAS UNDERTAKEN REASONABLE EFFORT TO PREPARE THE CONVOY MPF INDICES. CONVOY CANNOT GUARANTEE THE ACCURACY
 

 

Performance of Key Funds Classes:

Funds Classes

Month-On-Month

January-To-Date*

Asia (Ex-Japan) Equity Funds

-1.10%

-0.95%

Asia (Ex-Japan and Hong Kong) Equity Funds

-0.94%

-0.80%

Asia Bond Funds

-0.28%

-1.24%

China Equity Funds

-0.12%

4.59%

European Equity Funds

-2.67%

-1.39%

Global Bond Funds

-0.92%

-1.11%

Global Equity Funds

-0.05%

-0.06%

Greater China Equity Funds

1.42%

3.15%

Guarantee Funds

0.09%

-0.66%

HKD Bond Funds

0.49%

-1.30%

HKD Money Market Funds

0.08%

0.21%

Hong Kong Equity Funds

0.73%

3.49%

Hong Kong Equity (Index Tracking) Funds

-0.27%

3.02%

Japan Equity Funds

-1.08%

-1.47%

Lifestyle Funds – (>20% - 40% Equity)

-0.63%

-0.49%

Lifestyle Funds – (>40% - 60% Equity)

-0.52%

-0.12%

Lifestyle Funds – (>60% - 80% Equity)

-0.58%

0.13%

Lifestyle Funds – (>80% - 100% Equity)

-0.41%

0.55%

MPF Conservative Funds

0.03%

0.10%

Other Funds

-0.22%

0.32%

Asia Pacific (Ex-Japan) Equity Funds

-0.20%

0.51%

RMB and HKD Money Market Funds

-0.73%

2.02%

RMB Bond Funds

-0.62%

1.91%

US Equity Funds

2.07%

2.33%

DIS – Age 65 Plus Funds

0.06%

-0.36%

DIS – Core Accumulation Funds

0.19%

0.23%

 

* Performance is calculated from DECEMBER 31, 2017 to 30 April, 2018

SOURCE: CONVOY INVESTMENT RESEARCH DEPARTMENT, WEBSITE OF MPFA AND THOMSON REUTERS LIPPER

COMPILED BY THE CONVOY INVESTMENT RESEARCH DEPARTMENT

 

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About Convoy MPF Index

"Convoy MPF Index" is compiled by the Fund Research Department of Convoy Asset Management Limited, which reflects the performance of Hong Kong MPF and acts as a reference index of the movements and trend of Hong Kong MPF market. It is composed of at least 100 largest funds, covering at least 80% of total asset in the MPF market. The index constituent funds and proportions will be adjusted every six months. The index trend can be traced back to 1 December 2000. "Convoy MPF Index" is calculated with a weighted average return of portfolio weighted average method. Using this method of the proportion of the fund size, it is more effective to reflect the orientation of investors in selecting funds and the portfolio returns of general investors. This provides a great reference value and in line with the investment needs of the general public. "Convoy MPF Index" is released in the first week of each month.

 

About the Index: http://www.convoy.com.hk/zh_TW/mpf/mpf_index

 

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