Hong Kong's 4.8 million Mandatory Provident Fund (MPF) members are bracing for potential volatility in the Year of the Horse, which began on Tuesday after a record-breaking Year of the Snake delivered estimated earnings of HK$251.6 billion (US$32 billion), the highest since the scheme's launch in 2000.
Analysts from MPF Ratings, an independent pension research firm, highlighted the stark contrast as the seventh animal in the Chinese lunar calendar's 12-year cycle takes over. The Year of the Snake, which ended on Monday, saw earnings and contributions propel total MPF assets to HK$1.59 trillion by the end of January.
Performance data as of February 11 showed the 378 MPF investment funds achieving an impressive 18.8 per cent gain over the Year of the Snake, far surpassing recent years. This marked a significant rebound from the 12.3 per cent earned in the Year of the Dragon in 2024, and a recovery from losses of 4.5 per cent in the Year of the Rabbit in 2023 and 7.8 per cent in the Year of the Tiger in 2022.
Francis Chung, chairman of MPF Ratings, tempered expectations for the coming year, describing the outlook as “modest and inconclusive” based on historical patterns. He pointed to past Years of the Horse, noting that in 2014, MPF funds earned just 2.2 per cent, while in 2002 they suffered a loss of 0.4 per cent.
The shift into the Year of the Horse underscores the unpredictable nature of MPF investments, tied closely to global market fluctuations and economic cycles. With assets now at a peak of HK$1.59 trillion, members will be watching closely to see if the zodiac's reputed energy can sustain momentum or introduce the forecasted turbulence.
MPF Ratings' analysis serves as a cautionary note amid the celebratory close to the Snake year, reminding investors that while records can be set, repeating them may prove challenging in a volatile environment.
