(3 January 2018, Hong Kong) As of 28 December, the Convoy MPF Composite Index reported 236.05, breaking records for six consecutive months and resulting in a largest increase since 2009 with a cumulative increase of 22.99% from January-to-date. Benefiting from the prosperous stock market, the equity funds have reached a cumulative increase of 34.60% and the Convoy MPF Equity Index has increased by 2.04% month-on-month. The Convoy MPF Bond Index performed steadily in December with a cumulative increase of 4.66% this year. According to MPFA’s announcement that the number of MPF scheme members as of December 2016 was 4.19 million, each employee recorded an average gain of $36,673 in 2017.
The Fund Research Department of Convoy Asset Management Limited indicated that the passage of the U.S. tax reform met the market expectation and there was no major breakthrough in the three major U.S. indexes. This reflected that favorable news of tax reform has been mostly digested by the market. Benefiting from the strong performance in 2017, it is expected that there will be a continuous improvement in economic data in the first half of 2018 and the stock market will perform relatively well. However, due to the actual impact of the unwinding of the balance sheet and an increase in interest rate in the U.S. in the second quarter, the market is expected to be more volatile in the second half of 2018. At this stage, investors may consider locking profits in the first half of the year by adding a certain percentage of bond funds to diversify portfolio risk.
Kenrick Chung, Director of Product Management of Convoy Financial Services Limited, said that the overall performance of the MPF's is encouraging as the equity market rises, especially in Hong Kong stocks. However, scheme members should manage risks carefully. Members with low-risk appetite should consider locking their profits. In addition to the unwinding of the balance sheet and an increase in interest rate in the U.S., other major central banks also showed similar policy stances. President Trump’s policy and governance as well as geopolitical risks, such as North Korea's nuclear threat and European politics, will create turmoil in the capital markets. However, China’s economic trend will have a great impact on Hong Kong's economy. Members with a high-risk appetite should consider investing in Asia (Ex-Japan) Equity Fund. If the U.S. economy continues to improve, China will maintain its good momentum and eventually Asia as a whole will benefit.
Summary of Performance of MPF Key Fund Class in 2017:
- Equity Fund:
- Hong Kong Equity Fund performed best, increased by 2.19% in December and 39.78% from January-to-date
- European Equity Fund performed the worst, recorded a 20.29% increase from January-to-date
- Bonds Fund:
- Asian Bonds Fund performed best, increased by 6.56% from January-to-date
- HKD Bond Fund performed the worst, drop 0.01% month-on-month and increased by 2.91% from January-to-date
- Default Investment Strategy:
- The Core Accumulation Fund of the DIS performed well, rose by 0.96% month-on-month, up by 6.84% from April-to-date
- The Age 65 Plus Fund of the DIS increased by 0.23% in October, up by 3.25% from April-to-date