Mandatory Provident Fund Schemes Authority 8 February 2018 2017 MPF Performance 1
Mandatory Provident Fund Schemes Authority
8 February 2018
2017 MPF Performance
1
MPFhas added value to
members’ contributions
3
36.0 55.1
89.4 120.2
151.4
202.4
264.8
209.5
308.9
365.4 356.0
439.8
514.1
565.1 591.3
646.3
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
$ billion
MPF plays an important role in
retirement protection
Assets
22 Times
$843.5
billion
4
$13,000 $200,000
Late December 2001
MPF assets per member
increased to $200,000
Late December 2017
5
MPF has added value to
members’ contributions
Total assets:
$843.5 billion
Net returns:
$267.4 billion
Annualized
return:
4.8%
Annualized
inflation:
1.8%
-6.6%-8.5%
18.1%
8.4%6.2%
16.4% 16.8%
-30.2%
26.6%
7.8%
-11.3%
12.4%
7.4%
1.5%
-3.6%
0.9%
22.3%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Highest return
2nd highest
Financial tsunami
6
MPF yearly investment returns
Market conditions affect
investment return
$197.2 billion
7
MPF overall returns
#Up to December 2017
System’s returnsreflect members’ collective
choices and market
conditions
69%
18%
13%
Equities
Bonds
Deposits & Cash
Asset allocation as at 30 September 2017
9
Overall return reflects
members’ collective choices
Equities account for 69%
of MPF assets
Fund typeRisk
Level
Return
in 2017
Dec 2000 to Dec 2017
Annualized
return
Cumulative
return
Equity Fund High 34.4% 5.5% 147.7%
Mixed Assets Fund Medium to High 22.3% 4.6% 117.3%
Bond Fund Medium to Low 4.8% 2.7% 58.9%
Guaranteed Fund Low 3.0% 1.2% 23.4%
Money Market Fund(non MPF Conservative Fund)
Low 2.5% 0.6% 10.3%
Money Market Fund(MPF Conservative Fund)
Low 0.1% 0.7% 13.0%
10
Risk levels and returns of different fund types
11
Equity
Fund
Mixed Assets
Fund
Bond
Fund
Guaranteed
Fund
Money Market Fund
(MPF Conservative
Fund)
Money Market
Fund (Non MPF
Conservative Fund)
Volatility reflects risk level
Month
ly R
eturn
Highest and Lowest Monthly Returns of MPF Funds (December 2000 – December 2017)
Highest monthly return Lowest monthly return
Fund Category Return in 2017
Dec 2000 to Dec 2017
Annualized
return
Cumulative
return
Hong Kong equity 40.7% 7.4% 241.0%
China equity 40.3% N/A# N/A#
Hong Kong equity
(index tracking)39.3% 6.1% 174.8%
Asia equity 35.2% 7.6% 251.4%
Japan equity 24.3% 1.9% 37.4%
Global equity 22.4% 3.5% 78.9%
Europe equity 20.9% 1.7% 34.0%
US equity 19.5% 3.0% 64.5%
# Data not available as no equity funds were classified as China equity funds as at 1 December 2000.12
Returns of fundsof the same type vary
A member’s returndepends on
his investment choices
Total contributions
in 17 years$318,000 $318,000 $318,000
Member A Member B Member C
Investment choiceHong Kong
Equity Fund
Mixed Assets
Fund
MPF Conservative
Fund
14
Risk level High Medium to High Low
The monthly contribution of each scheme member is $1,550, inclusive of the employer’s and the
member’s contributions
Examples
15
0
100
200
300
400
500
600
700
800
MPF assets ($’000)
A: $702,000
B: $518,000
C: $329,000
Total contributions:
$318,000
Examples
Default Investment
StrategyA retirement investment strategy
balancing long-term risk
and return
17
80%
60%
40%
20%
Default Investment Strategy -
automatic de-risking
Core Accumulation
Fund
Age 65 Plus
Fund
Lower risk
assets
(mainly
global
bonds)
Higher
risk
assets
(mainly
global
equities)
DIS:Mixed assets funds
80%
50 - 64 65+18 - 49Age
Do not time the market
Review MPF investment regularly
18
Investment tips
19
• Enhance transparency of MPF funds
• Help scheme members get key information conveniently
20
Objectives
website:https://fpp.mpfa.org.hk/
21
Features
• One-stop information platform
• Three interactive sections
Fund size Launch date
LatestFund Expense
Ratio
Annualized returns covering
different periods
Cumulativereturn
Fund riskindicator
22
Comprehensive
fund information
Guaranteed
Fund
Money Market
Fund
MPF
Conservative
Fund
23
Equity
Fund
Mixed Assets
FundBond Fund
• On equity content
• 7 sub-groups, e.g.
– 81% to100% equity
– 21% to 40% equity
• On geographical allocation
or currency exposure
• 5 sub-groups, e.g.
– RMB bond funds
– Hong Kong dollar bond
funds
• On geographical
allocation
• 10 sub-groups, e.g.
– Asia equity funds
– Global equity funds
Six major MPF fund types
Compare with
the same type of funds
MPF has added value to members’ contributions
Fund Performance Platform helps members review funds from different perspectives
Members should take care of their MPF
25
Closing remarks
26
Take an active
approach
to your
retirement
investment