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January 21, 2025

Hong Kong MPF Soared 8.3% On Average In 2024

by Xav Feng.

Key Benchmarks Performance

US stock markets corrected from record high in December of 2024. Dow Jones Industrial Index and S&P 500 Index slumped 5.3% and 2.5%, while NASDAQ Composite Index rose 0.5%. Hong Kong Hang Seng Index soared 3.3% in December of 2024 and rallied 17.7% for the whole year of 2024(as of 2024/12/31). China’s Shanghai Composite Index rose 0.8% in December of 2024 and rallied 12.7% for the whole year of 2024 (as of 2024/12/31). For the whole year of 2024(as of 2024/12/31), US NASDAQ Composite Index soared 28.6% and became the top leading key benchmark all over global key core countries. Taiwan, S&P 500, US Philadelphia SE Semiconductors are top leading markets and delivered positive return of 28.5%, 23.3% and 19.3%, respectively, while Korea and Brazil were underperforming ones.

 

Global Key Benchmarks Performance

Source:LSEG Lipper, as of 2024/12/31

 

Asset Types Analysis

The total 376 Hong Kong Mandatory Provident Fund (MPF) registered for sale in Hong Kong posted negative return of 0.7% on average in December of 2024. For the whole year of 2024(as of 2024/12/31), Equity posted the best performance of 13.9% on average while Bond type posted negative return of 0.6%.

 

Hong Kong MPF Performance by LGC Analysis

There are overall 376 Hong Kong Mandatory Provident Fund (MPF) registered for sale in Hong Kong market with a total 24 Lipper Global Classifications. Among all 24 classifications, Equity China posted 3.1% on average and took the leading positions among all MPF classifications while Equity Hong Kong, Equity Greater China and Equity Japan posted negative return of 2.9%, 2.6% and 1.3%, respectively in December of 2024. For the whole year of 2024(as of 2024/12/31), the best outperforming sectors of MPF were Equity China (+22.7%), Equity US (+21.5%), Equity Other (+20.6%), Equity Hong Kong (+17.9%) and Equity Japan (+15.5%).

 

Top/Bottom 10 Hong Kong MPF Performance by Lipper Global Classifications, December 2024

Source:LSEG Lipper, as of 2024/12/31

 

Top/Bottom 10 Hong Kong MPF Performance by Lipper Global Classifications In 2024 (as of 2024/12/31)

Source:LSEG Lipper, as of 2024/12/31

 

 

Outlook

The US Federal Reserve has cut interest rates three times since last September with a total reduction of 100 basis points. China’s economy has struggled for momentum in 2024 largely due to a prolonged property market crisis, high local-government debt and sluggish consumption. Exports are likely to remain weak yet crucial to the Chinese economy, despite the increased importance of the domestic market. The values of Hong Kong’s total exports and imports of goods both recorded year-on-year increases, at 2.1% and 5.7% respectively, while the market had forecast year-on-year increases of 4.1% and 4.9% for exports and imports. Hong Kong’s exports are anticipated to grow 4 percent year-on-year for 2025. Although this is lower than the estimated 9 percent growth for 2024, it is higher than the average growth rate of 3 percent over the past decade.

However, the biggest force to hit Hong Kong and all Asia region in 2025 will likely be DonaldTrump’s second term, which kicks off in late January. Donald Trump has threatened 10% across-the-board tariffs for all imports and 60% on all Chinese imports. This would have a huge impact on Asian exports and a global knock-on effect. There will be more turbulence, conflict and uncertainties and even more risks in Sino-US relations in the next few years.

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