According to data from MPF Ratings Limited, the Mandatory Provident Fund (MPF) is estimated to have recorded a net inflow of approximately HKD11.98 billion in 1Q26, up 0.36% YoY, but 2.9% lower than the five-year historical quarterly average net inflow of HKD12.34 billion. As of end-March, the MPF system posted a return of -1.98% for the quarter, with total assets of approximately HKD1.535 trillion, equivalent to an average account balance of HKD320,109 for 4.79 million members.

Among them, DIS (Default Investment Strategy) accounted for nearly 35% of the quarterly net inflow, while traditional mixed-asset funds recorded net outflows. Japanese equities attracted 10.54% of total net inflows in 1Q26, about 13x their market share, which represents only 0.81% of total MPF assets. Although major trustees continued to dominate in terms of absolute net inflow amounts, net inflow data for 1Q26 also showed a resurgence among certain scheme sponsors. The shares of net inflows attracted by Fidelity, BOC-Prudential, Manulife and China Life were all significantly higher than their overall market shares.

Francis Chung, Chairman of MPF Ratings, an independent MPF research specialist in Hong Kong, noted concerns that MPF members appear to be using their MPF accounts for short-term market speculation rather than focusing on long-term wealth accumulation. The "1Q26 MPF Asset Class Fund Flow Summary" released by MPF Ratings showed substantial fund inflows into Japanese equities during the first three months of the year. The system recorded a quarterly net inflow of approximately HKD12 billion, up 0.36% YoY, but 2.9% below the five-year historical quarterly average net inflow of HKD12.34 billion.

Chung believes members should avoid excessively chasing short-term performance and instead focus on long-term investment. Allocating 10% of MPF net inflows to a non-core asset class that accounts for less than 1% of the overall MPF market warrants reflection. (hc/w)

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