<div id="readability-page-1">Hong Kong’s Mandatory Provident Fund (MPF) is poised to report a loss of over HK$100 billion (US$12.8 billion) for March this week, its worst monthly loss in dollar terms since its inception 25 years ago. The sharp fall in global stock markets last month hit the MPF hard, while the uncertainties ahead stemming from the Middle East conflict have led the pension regulator and analysts to urge the 4.8 million members to adopt a diversified approach. The 378 MPF investment funds suffered a HK$103.3 billion loss in the first three weeks of last month, according to MPF Ratings, an independent pension research firm. On average, each member lost HK$21,542 during the same period. The funds posted a loss of 6.33 per cent in the first three weeks of March, the worst since September 2022, when they lost 7.87 per cent, according to data from MPF Ratings. Francis Chung, the chairman of MPF Ratings, said he expected the pension fund’s full-month loss to exceed HK$100 billion, the largest monthly loss since the compulsory retirement scheme was launched in December 2000.  “Because of the war in the Middle East, the global capital markets in March fluctuated a lot, which negatively affected the MPF’s performance,” said Kenrick Chung, chief corporate solutions officer at Bay Insurance Brokers in Hong Kong. Hong Kong’s Hang Seng Index fell 7 per cent in March, the benchmark’s worst monthly performance in three years. The index shed 12 per cent from its late January high of 28,056, closing at 24,788 at the end of March. Other US and Asian markets also fell sharply in March after the US-Israel war on Iran began in late February, as investors started to factor in the consequences of a prolonged conflict in the Middle East by trimming their exposure to risk assets. “As uncertainty intensifies, MPF members should not try to time the market,” Kenrick Chung said. The pension regulator, Mandatory Provident Fund Schemes Authority (MPFA), urged members not to focus on short-term losses as that may lead them to “buy high and sell low”, according to its managing director Cheng Yan-chee. “MPF is a long-term investment spanning over 40 years, which will inevitably cover economic cycles and market fluctuations,” Cheng said in a statement to the South China Morning Post. MPF Ratings’ data also showed the MPF’s long-term results remained solid, with five-year and 10-year annualised MPF returns of around 1.28 per cent and 4.01 per cent, respectively. “MPFA considers that short-term figures do not have any reference value for MPF scheme members and may even mislead them into viewing MPF from a short-term speculative perspective,” Cheng said. “Given the current market volatility, it is crucial for scheme members to focus on diversifying their MPF investments to reduce potential risks.” The poor March performance is likely to drag down the MPF’s first-quarter performance. The MPF investment funds reported an average net return of 16.5 per cent in 2025, the third consecutive year the scheme returned an annual gain, following an 8.6 per cent average net return in 2024, and 3.4 per cent in 2023. Hong Kong lawmaker Robert Lee Wai-wang, chairman of Grand Finance Group, said the MPF posted decent gains at the start of this year, but the March performance would affect the first quarter’s returns as a whole. Lee said he expected stock markets to remain volatile due to the Middle East conflict and high oil prices. “While it is clear that there is very little direct exposure held by MPF Funds in the Middle East financial markets, the war’s indirect impact on oil prices, inflation and economic growth has been significant,” said Elvin Yu, CEO and founder of Goji Consulting, a Hong Kong-based pension consultant. “Given the markets’ adjustments and the challenge in predicting when and how the war in Iran will end, we suggest that investors adopt a neutral exposure to risk assets and to overweight quality over highly-leveraged securities and assets.” Amid such market volatility, Francis Chung said MPF members could consider investing in the default investment strategy fund under the MPF scheme, a type of mixed-asset fund that automatically switches investments between stocks and bonds based on age-based risk profiles. “The risk of trying to time markets is far greater than remaining invested,” he said. “Diversification is key to consistency.” Established in 2000, the MPF collects monthly contributions from employers and employees, with each contributing 5 per cent of a worker’s monthly salary, capped at HK$3,000 a month. Employees can choose to invest their contributions in different investment funds and make additional contributions. </div>

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<p>Hong Kong's Mandatory Provident Fund (MPF) is expected to report a loss exceeding HK$100 billion (US$12.8 billion) for March, marking its worst monthly performance since its inception. The decline is attributed to a sharp fall in global stock markets and uncertainties from the Middle East conflict. Each of the 4.8 million members lost an average of HK$21,542. The MPFA advises members to focus on long-term investments and diversify their portfolios to mitigate risks. Despite the poor March performance, long-term returns remain solid, with five-year and ten-year annualized returns of 1.28% and 4.01%, respectively.</p>

Hong Kong’s MPF set to report worst performance in 3 years in March