A recent report pointed out that in the first quarter of this year alone, MPF (MPF) members lost an average of about $16,600, with Chinese and Hong Kong stock funds being the "culprits". The worst-performing fund recorded a drop of nearly 16% in the quarter. , far worse than the Hang Seng Index, which fell by about half during the period.
Some people in the industry clearly stated that stock-picking funds rely on the investment decisions of fund managers, and they can avoid the important and still have advantages in the long run; they also believe that China and Hong Kong stocks have accumulated a lot of losses, and even if there are still uncertainties in the market, the outlook is still cautiously optimistic. .
"Workers" have worked hard for half a lifetime, and naturally hope to enjoy their old age and enjoy life after retirement. The MPF scheme launched by the government aims to make citizens accustomed to saving through the system, and also achieve wealth appreciation through investment.
However, dragged down by factors such as the epidemic, the mainland's strengthening of economic regulation, the market's expectation of further interest rate hikes in the United States, and the uncertain situation in Russia and Ukraine, the Hang Seng Index fell as low as 18,235 points last month. MPF also "sees blood".
According to the latest data from MPF Ratings, it is estimated that about $15 billion of MPF assets evaporated in March alone, with an average loss of over $3,200 per MPF member, compared with an average loss of about $16,600 in the first quarter.
MPF consultancy firm Chun Lung also estimates that the total loss of the MPF market has exceeded 74 billion yuan since the beginning of the year, with an average loss of HK$16,318 per person in the first quarter.
(Data source: MPF Ratings)
China and Hong Kong stock funds lost nearly 16% in the first quarter
The MPF rating described the performance of March as a "bad omen", and the culprit was China and Hong Kong stock funds. The average investment return in March was -7.83%, and the average investment return in the first quarter was -12.31%, becoming the The worst-performing asset class in March and this year; it also recorded three consecutive quarters of red gains and its ninth monthly loss in the past 12 months.
In the past three months alone, it recorded an average loss of 5 to 6% in the first quarter, making it the top five best-performing Chinese and Hong Kong stock funds, all tracking the HSI.
As for the five worst-performing Chinese and Hong Kong stock funds, they all recorded losses of 15% to 16% on average in the first quarter, all of which were selected by the fund managers themselves.
Taking the “Greater China Equity Fund” in the Wantong Mandatory Provident Fund Scheme under MassMutual Insurance as an example, as of March this year, the fund’s top three holdings were TSMC (10.06%), Tencent (9.94%) and AIA (4.79%) %), the others are Meituan, Hong Kong Stock Exchange, Ping An and WuXi Biologics, all of which have a net asset value percentage of more than 2 to 3%, which are all stocks that have fluctuated greatly in the past year.
Lei Zhihai: Fund volatility is not a bad thing
It is often said that MPF depends on the long-term, if MPF members have held the same fund for ten years.
According to MPF Ratings, China and Hong Kong stock funds, which performed poorly in the first quarter, did not perform too badly in the long run.
BOC-Prudential's "My China Equity Fund" has an average annual return of about 9% over the past ten years, while the "Greater China Equity Fund" of the Wanquan Mandatory Provident Fund Scheme is about 8.5%.
From the above data, it can be seen that the performance of index-tracking funds is indeed stable in the short-term, but the returns of stock-picking funds are higher in the long-term.
In an interview with "Hong Kong 01", Lei Zhihai, chief investment strategist of Sun Life Asset Management, pointed out that stock-picking funds rely on the investment decisions of fund managers. Compared with passive funds that do not change much, they have greater volatility, but "high volatility is not a bad thing." , the reason is that during the rising market, the stock selection fund is more aggressive, on the contrary, it will be more conservative in the falling market.
As for China and Hong Kong stock funds, which fell by nearly 16% in the first quarter, he explained that last year, China and Hong Kong stocks have accumulated a certain amount of decline, and their stock prices are at a low level. Fund managers or brokerages were optimistic about the rebound of Chinese and Hong Kong stocks at the beginning of the year, so they increased their bets.
Lei Zhihai believes that the stocks in China and Hong Kong have fallen to low residual levels, and he is cautiously optimistic about the prospects.
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China and Hong Kong stocks cautiously optimistic
He believes that in the context of the Federal Reserve's "water withdrawal", the war between Russia and Ukraine, and the high global inflation, the external market conditions are quite volatile. At the same time, Chinese and Hong Kong stocks are also affected by the Sino-US audit turmoil, and the market is concerned about China's role in the Russia-Ukraine war. What's the role of China and Hong Kong stocks, worrying about China being sanctioned by Western countries.
However, looking at the current situation, the Sino-US audit storm is expected to be resolved, and the stock price of Chinese stocks has fallen to a low level, and the value of the stock is high. However, there are still political uncertainties such as the situation in Russia and Ukraine, so China and Hong Kong stocks are cautiously optimistic. .
He also believes that with the slowdown of the new crown epidemic and the recovery of the global economy, many Southeast Asian regions that focus on export trade or tourism reopen their borders, and the Asian stock market will be boosted.
In terms of European and American stock markets, due to the impact of the situation in Russia and Ukraine and the fact that Europe is very dependent on Russian energy imports, the economy will be greatly affected, so I am not optimistic about European stocks. Be neutral.
The MPFA pointed out that if members lack investment knowledge and time management, they should consider a default investment strategy commonly known as "lazy fund".
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Everbright Securities: The Hang Seng Index may hit 25,000 at the end of the year
Wu Lixian, a securities strategist at Everbright Securities International, also pointed out that the market has generally digested a series of negative factors, and technology companies have also announced their results. Up 10%, the Hang Seng Index hovers between 21,000 and 24,000 points, and is expected to rise to 25,000 points by the end of the year.
The MPFA responded to the "MPF Ratings" report earlier, noting that it has noticed that from time to time there are institutions that publish quarterly or even one-month short-term performance reports of MPF. The full MPF is a long-term investment of 30 to 40 years, during which it is inevitable to experience Depending on the economic cycle, plan members do not need to worry too much about short-term market fluctuations and should not try to capture market conditions, but should regularly review their investment portfolios.
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