MPF Members Lost HK$8,677 Each in October as Tech Rout Hits Asian Stocks
SingTao · 4 SOURCES2 days ago6 MIN
Summary
MPF advisory firm GUM reported that mandatory pension fund members lost an average of HK$8,677 each in October, marking the second consecutive month of decline and the steepest monthly drop since March. The overall MPF Composite Index fell 2.6 percent to 296.4 points, driven by a 4 percent slump in equity funds amid concerns that massive AI capital expenditures may not generate proportionate returns. Fixed income funds stood out as the sole asset class delivering positive returns, with the Fixed Income Fund Index rising 0.4 percent to 133.9 points. Despite the monthly loss, members still held year-to-date gains averaging HK$11,610.
Key Points
- The MPF Composite Index dropped 2.6 percent in October to 296.4 points, while the Stock Fund Index fell 4 percent to 427.9 points and the Mixed Asset Fund Index declined 2.2 percent to 300.7 points
- Greater China equity funds tumbled 9.8 percent and Asian equity funds fell 8.2 percent, making them the worst-performing stock fund categories; Hong Kong equity funds dropped between 5.4 and 7.6 percent
- US healthcare stocks surged to record highs, propelling healthcare-focused equity funds up 8.6 percent—October's best-performing stock fund category—while Japanese equity funds led year-to-date returns at 19.3 percent
- All fixed income fund categories posted gains, with global bond funds rising 1.5 percent, Hong Kong dollar and Asian bond funds each gaining 1.3 percent, and RMB bond funds up 0.4 percent
- GUM Chief Investment Officer Liu Jia-hong (劉嘉鴻) attributed the decline to market concerns about AI capital expenditure returns causing a sell-off in technology-heavy Asian markets, while falling US bond yields supported fixed income
Why It Matters
The October downturn highlights how Hong Kong workers' retirement savings remain exposed to global technology sector volatility and US monetary policy shifts, with Greater China and Hong Kong equity funds now showing year-to-date losses despite earlier gains . With November bringing US midterm elections, a Federal Reserve decision in December, and upcoming tech earnings reports, GUM expects market turbulence to persist—raising the prospect that the MPF system's 3.48 percent year-to-date return could turn negative for 2026 .
The October downturn highlights how Hong Kong workers' retirement savings remain exposed to global technology sector volatility and US monetary policy shifts, with Greater China and Hong Kong equity funds now showing year-to-date losses despite earlier gains . With November bringing US midterm elections, a Federal Reserve decision in December, and upcoming tech earnings reports, GUM expects market turbulence to persist—raising the prospect that the MPF system's 3.48 percent year-to-date return could turn negative for 2026 .