Convoy MPF Composite Index decreased by 10.66% January to date in an unstable global investment climate
(2 January 2019 – Hong Kong) As of 24 December, the Convoy MPF Composite Index was 211.15, with a 4.10% decrease month-to-month and a 10.66% decrease January-to-date. According to the MPFA's announcement, the number of MPF scheme members was 4.27 million as of December 2017. Each employee lost an average of about HKD$21,932.76 in this year and lost an average of about HKD$7,869.04 in December. The market expects a slowdown of interest increase in the U.S. Hence, the Bond Funds of this month performed as hedging tools, leading a rise of 1.24% month-on month in the Convoy MPF Bond Index. HKD bond funds had the best performance with a 1.25% increase single-month.
HKD bond funds remain resilient during sharp fall in U.S. stocks
Convoy Financial Services Limited said that the sharp fall in U.S. stocks and concerns for global economic growth impacted the overall sentiment in investment market. The stock market suffered a blow from a series of political incidents in December, including the continuous chaos of Brexit in which the opposition Labour Party even tabled a motion of no confidence in British Prime Minister, and the uncertainties of China-U.S. negotiation. The market worried about the actual influence these events have on the future trade policies an d economic growth, concerning that the inversion of part of the U.S.Treasury yield curve for the first time in more than a decade, and Federal Reserves’ persistence on raising interest rate in December and its comment about no major changes on the raise will be the omens for U.S. economic downturn. As a result, significant sell-off of U.S. stocks dragged down U.S. Equity Funds to become the worst fund category in the month with a 14.20% decrease single-month.
Summary of Performance of MPF Key Funds Class in December:
- Equity Funds:
- U.S. Equity Funds performed the worst with a 14.20% decrease month-on-month and a 12.38% decrease January-to-date
- Bonds Funds:
- HKD Bond Funds performed well relatively, recorded a 1.25% increase month-on-month and a 0.14% increase January-to-date
- Default Investment Strategy:
- The Core Accumulation Funds of the DIS decreased by 6.13% month-on-month, decreased by 8.52% January-to-date
- The Age 65 Plus Funds of the DIS decreased by 1.22% month-on-month, decreased by 2.67% January-to-date
Convoy MPF Index Trend
- SOURCE: CONVOY FINANCIAL SERVICES LIMITED, WEBSITE OF MPFA AND THOMSON REUTERS LIPPER
- COMPILED BY THE CONVOY FINANCIAL SERVICES LIMITED
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Performance of Key Funds Classes:
| Funds Classes | Month-On-Month | January-To-Date* |
| Asia (Ex-Japan) Equity Funds | -4.05% | -17.82% |
| Asia (Ex-Japan and Hong Kong) Equity Funds | -3.80% | -16.79% |
| Asia Bond Funds | 0.58% | -1.68% |
| China Equity Funds | -5.44% | -14.49% |
| DIS – Age 65 Plus Funds | -1.22% | -2.67% |
| DIS – Core Accumulation Funds | -6.13% | -8.52% |
| European Equity Funds | -6.29% | -16.25% |
| Global Bond Funds | 1.11% | -2.08% |
| Global Equity Funds | -10.98% | -15.34% |
| Greater China Equity Funds | -4.49% | -17.61% |
| Guarantee Funds | -0.36% | -2.58% |
| HKD Bond Funds | 1.25% | 0.14% |
| HKD Money Market Funds | 0.10% | 0.84% |
| Hong Kong Equity Funds | -4.16% | -15.57% |
| Hong Kong Equity (Index Tracking) Funds | -3.32% | -11.77% |
| Japan Equity Funds | -9.45% | -18.23% |
| Lifestyle Funds – (>20% - 40% Equity) | -1.50% | -6.46% |
| Lifestyle Funds – (>40% - 60% Equity) | -3.26% | -9.33% |
| Lifestyle Funds – (>60% - 80% Equity) | -4.88% | -12.02% |
| Lifestyle Funds – (>80% - 100% Equity) | -6.59% | -15.12% |
| MPF Conservative Funds | 0.07% | 0.59% |
| Other Funds | -5.06% | -11.95% |
| Asia Pacific (Ex-Japan) Equity Funds | -4.97% | -16.21% |
| RMB and HKD Money Market Funds | 0.61% | -1.80% |
| RMB Bond Funds | 0.75% | -0.67% |
| U.S. Equity Funds | -14.20% | -12.38% |
* Performance is calculated from 31 DECEMBER 2017 to 24 December 2018
SOURCE: CONVOY FINANCIAL SERVICES LIMITED, WEBSITE OF MPFA AND THOMSON REUTERS LIPPER
COMPILED BY CONVOY FINANCIAL SERVICES LIMITED
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