The Mandatory Provident Fund (MPF) delivered another solid month in February, with Hong Kong and China markets driving strong returns across major asset classes. The GUM MPF Composite Index rose 2.4% to 255.3 points, while equity funds outperformed, benefiting from a revaluation of Chinese tech stocks and shifting global market dynamics.
Key Highlights for February 2025
• 📈 GUM MPF Equity Fund Index: +3.8% (353.2 points)
• 📊 GUM MPF Mixed Assets Fund Index: +1.8% (254.7 points)
• 💰 GUM MPF Fixed Income Fund Index: +0.5% (129.7 points)
• 🏆 Best-Performing Fund: Hong Kong Equity Fund (Index-Tracking) (+13.4%)
• 🔻 Worst-Performing Fund: U.S. Equity Fund (-2.7%)
• 🔄 Average MPF gain per member: HK$6,756 in February, HK$11,128 YTD
Market Drivers & Investment Insights
1. China & Hong Kong Stock Surge
The rise of Deepseek and renewed confidence in Chinese tech stocks led to a strong revaluation of Hong Kong and Mainland markets. Meanwhile, weak U.S. consumer data pressured high-valuation U.S. stocks, contributing to MPF performance divergence.
2. Global Market Uncertainty & U.S. Policy Shifts
• Ongoing Russia-Ukraine negotiations and the collapse of a U.S.-Ukraine mineral agreement added market volatility.
• The new Trump administration implemented aggressive economic policies, increasing geopolitical tensions and risk exposure.
3. Portfolio Strategy: Rebalancing for Market Swings
GUM’s Strategy and Investment Director, Martin Wan, advises MPF members to consider “Portfolio Rebalancing” strategies to manage equity exposure vs. risk tolerance, ensuring long-term portfolio stability amid global uncertainty.
Equity Fund Performance: China & Hong Kong Lead, U.S. Lags
📌 Hong Kong-focused funds dominated, while the U.S. equity fund struggled:
Rank Equity Fund Feb 2025 Return YTD Return
🏅 1 HK Equity Fund (Index Tracking) +13.4% +14.5%
🥈 2 HK Equity Fund +11.5% +12.2%
🥉 3 Greater China Equity Fund +7.6% +8.4%
4 European Equity Fund +3.5% +9.3%
9 U.S. Equity Fund -2.7% +0.9%
💡 Takeaway: Investors with high China exposure saw double-digit gains, while global funds delivered mixed results.
Mixed Assets & Fixed Income: Stability Amid Market Swings
📌 Mixed asset funds benefited from equity exposure, with higher-risk funds gaining the most:
Rank Mixed Asset Fund Feb 2025 Return YTD Return
1 Mixed Asset Fund (80-100% Equity) +2.9% +4.7%
2 Target-Date Fund +2.8% +4.4%
8 DIS Age 65 Plus Fund +0.9% +1.7%
📌 Fixed income funds saw modest gains, with Asian and global bonds outperforming due to falling interest rates and geopolitical uncertainty:
Rank Fixed Income Fund Feb 2025 Return YTD Return
1 Asian Bond Fund +1.7% +2.4%
2 Global Bond Fund +1.3% +1.7%
8 RMB Bond Fund -0.1% +0.9%
💡 Takeaway: Higher equity exposure yielded stronger returns, while bonds provided stability in a volatile environment.
What’s Next?
With geopolitical tensions rising and U.S. policy shifts accelerating, investors should watch for:
✅ China’s tech sector rebound & HK equity momentum
✅ U.S. interest rate trends & inflation data impact
✅ Global bond market adjustments amid uncertainty
