Since the beginning of 2022, affected by the fluctuations in the stock and bond markets, the returns of the stock and bond funds under the Mandatory Provident Fund (MPF) have been poor. Hong Kong dollar money market funds) "run out".
Conservative funds mainly invest in short-term bank fixed deposits, which are like "cash warehouses". Under the interest rate hike cycle, returns are expected to follow the increase in fixed deposit interest rates. Can they continue to look high?
Both BOC-Prudential and Manulife expect the return of conservative funds to rise by 5% next year, which is in line with the high-interest fixed deposits currently offered by banks on the market.
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BOC-Prudential and Manulife expect conservative fund returns to reach 5% in 2023
According to the data provided by Morningstar to "Hong Kong 01", from the beginning of 2022 to December 23, except for the Hong Kong dollar monetary fund investing in short-term bank deposits, which recorded a return of 0.17%, all others recorded negative returns.
If we look at December alone, the Hong Kong dollar money market fund returned 0.22%, but it was far from the best-performing Hong Kong stocks at 5.22%. The worst-performing U.S. stocks recorded a negative return of 5.8%.
According to GUM data, the best performer among conservative funds in December was BOC-Prudential, with a rate of return of 0.23% and an annualized rate of return of 2.77%.
This was followed by Manulife with a return of 0.18% and an annualized return of 2.11%.
AIA ranked third, with a return of 0.2% and an annualized return of 2.4%.
Both BOC-Prudential and Manulife expect the return of conservative funds to rise by 5% next year, which is in line with the high-interest fixed deposits currently offered by banks on the market.
BOCI-Prudential stated that its funds have strategically shortened the maturity date of the investment portfolio from the third quarter of 2022, and the bank can negotiate higher interest rates among different banks. If the current interest trajectory remains unchanged, it is expected that before deducting management fees The return can reach 5%.
Manulife said that it is committed to seeking higher-yield investment tools in a high-interest environment, and the return of conservative funds next year can be expected to increase by 5%.
GUM data show that,
Money outflows from conservative funds to stocks in November
According to GUM data, since the third quarter of 2022, the risk aversion sentiment of wage earners has increased, and funds have continued to flow into low-risk investment projects such as conservative funds and bonds. In October alone, more than 2.3 billion yuan of funds flowed into such fixed-income funds.
By November, funds flowed from MPF conservative funds and guaranteed funds to stock funds.
Among them, the net inflow of funds to US stock funds was nearly 1.6 billion Hong Kong dollars, and to Hong Kong stock funds was about 1.2 billion Hong Kong dollars.
However, Wang Yulin, executive director of GUM, pointed out that the trend of capital inflows into conservative funds continued until the end of October, which means that many wage earners still lost the opportunity to catch up on the rebound in November. Low switching funds.
Wang Yulin predicts that the return of conservative funds for the whole year next year will reach 4 to 5%. Some conservative funds have an annualized return of more than 2%, but there are also funds with a return of less than 1%. Therefore, it is necessary to choose a plan carefully, not simply choose a fund.
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Return of some conservative fund plans may be lower than 1%
Lei Zhihai, chief investment director of Asset Management Group, believes that conservative funds do not have investment value.
He said that conservative funds will break out in 2022, but not because of their good performance, but because of the poor performance of other funds.
"The situation is like the receding tide of the sea. The stubborn rocks have not retreated together, but the question is whether this stubborn rock has investment value." Taking HSBC Conservative Fund as an example, although the accumulated return of the fund has exceeded 20% since its establishment, it is converted into a compound annual return Only a few tenths of a percent.
Wang Yulin said that conservative funds mainly invest in short-term bonds, demand or short-term fixed deposits.
Under the US interest rate hike environment, Hong Kong banks have recently raised interest rates on fixed deposits to as high as 4 to 5%. However, there are many requirements such as new funds, which are different from conservative funds. However, it is expected that the returns of conservative funds in 2023 will still need to match the returns on fixed deposits in the market. The material can reach 4 to 5 centimeters.
It is worth noting that some conservative funds have an annualized return of more than 2%, but there are also funds with a return of less than 1%. Therefore, it is necessary to choose a plan carefully, not simply choose a fund.
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