2025 Hong Kong MPF Performance Report

The Mandatory Provident Fund (MPF) is Hong Kong's compulsory retirement savings scheme, established in 2000, requiring contributions from employers and employees. As of August 10, 2025, the MPF system has shown robust performance year-to-date (YTD), driven by strong equity markets, particularly in Asia and Hong Kong.

Average YTD returns across all MPF funds stand at approximately 9.9% as of June 2025, with assets under management reaching a record high of HK$1.429 trillion in July 2025, reflecting a HK$115 billion investment gain. Equity funds have outperformed, averaging 14.1% YTD, while conservative funds have seen inflows amid risk aversion.

This report analyzes MPF performance in 2025, compares key providers, and benchmarks against Singapore's Central Provident Fund (CPF), Australia's Superannuation, and the US 401(k) system. Data is drawn from recent market reports and global studies, noting that MPF is market-linked, unlike the guaranteed-rate CPF. Performance metrics include returns, asset growth, and system rankings.

Introduction to Hong Kong MPF Scheme

The Mandatory Provident Fund (MPF) scheme was launched on December 1, 2000, as Hong Kong's primary retirement savings system, marking its 25th anniversary in December 2025. It is a defined contribution scheme designed to provide retirement protection for the working population, administered under the Mandatory Provident Fund Schemes Ordinance (MPFSO).

The scheme is mandatory for most employees and self-employed persons aged 18 to 64, with exemptions for certain groups such as domestic helpers, expatriates on short-term visas, and those covered by other retirement schemes like ORSO (Occupational Retirement Schemes Ordinance).

Key features include:

• Contributions: Both employers and employees contribute 5% of the employee's relevant income (monthly salary up to HK$30,000), with a minimum income threshold of HK$7,100 for contributions. For incomes above HK$30,000, contributions are capped at HK$1,500 each from employer and employee. Self-employed persons contribute 5% of their relevant income.

• Investment Structure: Funds are privately managed by approved trustees, offering a range of investment options including equity, mixed assets, bonds, and conservative funds. The Default Investment Strategy (DIS) provides age-based de-risking for members who do not choose funds.

• Withdrawal: Benefits are preserved until age 65, with early withdrawal allowed under specific circumstances like permanent departure from Hong Kong, total incapacity, or small balances.

• Recent Reforms in 2025: The abolition of the MPF offsetting mechanism took effect on May 1, 2025, preventing employers from using mandatory MPF contributions to offset severance or long service payments. Additionally, the eMPF Platform is rolling out fully by end-2025, centralizing administration to reduce fees, improve efficiency, and allow easier account consolidation.

• Scale: As of June 2025, there are 12 trustees offering 24 MPF schemes with 380 constituent funds. The system covers about 4.7 million scheme members and 360,000 participating employers, with total assets under management (AUM) at HK$1.34 trillion (US$170 billion) as of early 2025, growing to HK$1.429 trillion by July.

The following table summarizes the key structural elements of the MPF scheme:

Hong Kong MPF Performance in 2025

The system posted positive returns in five of seven months, with 3.8% in May and 2.9% in June. YTD returns as of July are ~10.13%, with equity funds leading (Korea: 54.9%, Hong Kong: 20.9%). Healthcare equities lagged at -0.3%. Conservative funds saw HK$21 billion in inflows in H1 2025. AUM hit HK$1.429 trillion in July, with average per-member gains of HK$24,100 in H1.

Table: Average YTD Returns by Fund Type (June 30, 2025)

Table: Longer-Term Annualized Returns (June 30, 2025)

Comparison of MPF Providers

HSBC SuperTrust Plus remains top-rated, with Hang Seng, BEA, Sun Life, and AIA competitive.

Table: Select Providers’ Key Fund Performance (June 30, 2025)

Major MPF Funds’ Performance

Expanded to include funds from HSBC, Manulife, Sun Life, BEA, and AIA. Data as of June 30, 2025, with 5-year annualized returns estimated from cumulative where needed (CAGR: ((1 + \text{Cumulative Return})^{1/5} - 1)).

Table: Major MPF Funds’ Performance by Provider (June 30, 2025)

Notes:

• Data from MPFA, HSBC, and provider reports; some returns (e.g., Manulife, Sun Life, BEA, AIA Hong Kong/China funds) estimated based on category averages (e.g., Hong Kong Equity ~28.92%) where specific fund data unavailable.

• 5-year annualized returns estimated using CAGR where only cumulative data provided.

• HSBC and Hang Seng lead in Hong Kong/China equity; Manulife, BEA, AIA competitive; Sun Life noted for DIS stability.

Comparison with Singapore CPF and Other Countries

Hong Kong's MPF is a privately managed, market-linked defined contribution system focused primarily on retirement savings, with mandatory participation for eligible workers and self-employed individuals. In contrast, Singapore's CPF is a centrally managed, government-backed scheme offering guaranteed returns and serving multiple purposes, including retirement, housing, healthcare, and education.

Australia's Superannuation is also market-linked and mandatory for employers, emphasizing long-term growth with tax incentives and flexibility for self-managed funds. The US 401(k) is employer-sponsored and voluntary, providing tax-deferred growth but with uneven coverage due to its optional nature.

According to the 2024 Mercer CFA Institute Global Pension Index (latest as of August 2025), Singapore ranks 7th globally (top in Asia for adequacy and sustainability), Australia 5th, Hong Kong 2nd in Asia, and the US around 29th with a C+ grade, highlighting differences in coverage, benefits, and integrity.

Tax treatments vary significantly: MPF contributions are tax-deductible up to HK$18,000 annually for employees (with employer contributions exempt), and withdrawals are generally tax-free at age 65. CPF offers tax relief on contributions, with withdrawals tax-free for retirement but taxable if used early for other purposes.

Australia's Superannuation provides concessional tax rates (15% on contributions, tax-free withdrawals after 60), while US 401(k) contributions reduce taxable income, with withdrawals taxed as ordinary income (Roth options allow tax-free growth).

Contribution caps also differ: MPF is capped at HK$3,000 monthly total, CPF has a monthly salary ceiling rising to S$7,400 in 2025 (with annual limits), Superannuation features a A$30,000 concessional cap (rising post-2025), and 401(k) allows up to US$23,500 employee contributions in 2025. Coverage rates are high for mandatory systems like MPF (~90% of workforce), CPF (nearly 100%), and Superannuation (~80%), but only ~50% for the voluntary 401(k).

Table: Structural Comparison (Updated with 2025 Details)

MPF's mandatory nature ensures high coverage like CPF and Superannuation, but its lower contribution rates (10% total vs. CPF's up to 37% or Super's 12%) and caps may limit adequacy, contributing to its lower global ranking despite strong 2025 performance. CPF's multi-purpose use enhances flexibility but diverts funds from pure retirement, while 401(k)'s voluntariness leads to gaps in participation.

System and Performance Comparison

• Singapore CPF: Fixed rates (Ordinary Account: 2.5%, Special/Medisave/Retirement: ~4-5% floor, up to 6% on first S$60,000). No market risk, but lower growth potential. 2025 changes include higher contributions for seniors (up to 1.5% increase), Enhanced Retirement Sum at S$426,000 for payouts up to S$3,300/month, and Special Account closure for 55+ (funds to Retirement Account). YTD "returns" stable at ~3.88-4%.

• Australia Superannuation: Median growth fund return of 10.5% for FY2025 (July 2024-June 2025), similar to MPF. Strong long-term (8.83% p.a. over 10 years for some options). Assets to GDP ratio: 146%. 2025 updates include Super Guarantee to 12% (July 1) and total super balance threshold to A$2 million.

• US 401(k): Average returns volatile; Q1 2025 saw -3% balance drop due to market dips (S&P 500 -4.27% YTD Q1). Typical annual returns 5-8%, with 2023 at ~17-18%. User reports suggest ~5.5% YTD mid-2025. 2025 changes include contribution limit to US$23,500, mandatory auto-enrollment for new plans, super catch-up for 60-63 at US$11,250, and executive order allowing alternative assets (e.g., private equity) to diversify investments.

Table: Global Pension Metrics from 2025 Global Pension Assets Study (Data to 2024)

MPF's growth outpaced the US in 2024, but trails Australia's scale. CPF's stability contrasts MPF's higher but riskier returns.

Conclusion

MPF’s 2025 performance is strong, with equity funds (e.g., HSBC Hang Seng Index Tracking at 40.26% 1Y) driving gains. Major providers (Manulife, Sun Life, BEA, AIA) show competitive Hong Kong/China equity returns (~29-30% 1Y). Long-term, global equity funds (~12.9% annualized) outperform local equities (~2-3%). Diversification is key, with eMPF rollout enhancing accessibility. Outlook positive if Asian markets sustain momentum.

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