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MPFA announces 2020 MPF investment performance

The MPFA today (8 February) announced the investment performance of the MPF System in 2020. As at the end of December 2020, the total MPF assets amounted to about $1.14 trillion, of which $410 billion (36%) was investment returns, net of fees and charges. In 2020 alone, the MPF System registered a return of 11.7%. The annualized return was 4.8% since the inception of the MPF System in 2000, which was 0.7 percentage point higher than in 2019, outperforming the inflation rate of 1.8% over the same period.


MPFA Chief Corporate Affairs Officer and Executive Director Mr Cheng Yan-chee said, “Notwithstanding the impact created by the COVID 19 pandemic on the global economy since early 2020, the total MPF assets increased steadily over the past year, recording a double digit investment return for the second consecutive year, reflecting the long-term resilience and stability of the MPF System.”


In 2020, all six MPF fund types – equity funds, mixed asset funds, bond funds, guaranteed funds, MPF conservative funds and money market funds – posted positive returns. Equity funds and mixed asset funds registered returns of 15.1% and 13.2%, respectively. Bond fund returns recorded a year-on-year increase of 3.5 percentage points to 7.7%, making it the fund type with the largest increase in investment returns last year.

 

Regarding the Default Investment Strategy (DIS), which features automatic de-risking, a globally diversified investment strategy and a fee cap, its Core Accumulation Fund and Age 65 Plus Fund yielded an overall return of 12.3% and 8.8% respectively last year.

 

 

Mr Cheng Yan-chee encouraged scheme members with insufficient investment knowledge or time to manage their MPF to consider the DIS. He also reminded scheme members that the MPF is a long-term investment spanning 30 to 40 years and that short-term volatility in the financial markets from time to time is inevitable. He advised scheme members to allocate their investment portfolio according to their risk tolerance level and stage of life, and should not try to time the market.


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8 February 2021