Editorial | New MPF platform to offer Hong Kong investors more control over portfolios
- The dozen MPF account providers are due to complete the shift to the new electronic platform, which allows for day-to-day adjustments of holdings, by the end of 2025
Hong Kong is overhauling the Mandatory Provident Fund (MPF) system, launching a single unified platform for members, trustees and employers. The long-overdue move, the first major reform since the MPF was launched in 2000, will offer investors more control over their portfolios and allow them to more swiftly adjust the make-up of holdings in response to market shifts.
For compulsory retirement accounts, the approach for many members runs counter to logic used in day-to-day investing. Because MPF returns can typically be withdrawn when one turns 65, more than a few of the 4.75 million members simply set up a portfolio when opening an account, then forget about it until the annual statement arrives.
When markets boom, this can yield a pleasant surprise.
But Hong Kong’s retirement scheme has had it rough lately. The Hang Seng Index is down more than 45 per cent over the past three years.
The MPF suffered losses in 2021 and 2022, managing to avoid an unprecedented third year of losses with a 3.5 per cent gain in 2023. Most of those came from other markets such as Japan and the United States, where global capital flowed to take advantage of high interest rates.
They offset losses in funds focused on mainland China and Hong Kong.
