MPF splits as Korean funds surge and China equity funds decline

Korean funds gained 74% YTD on semiconductor recovery and AI demand.

Hong Kong’s Mandatory Provident Fund (MPF) fell 1.6% in September but gained 6.3% year to date through the third quarter, according to LGC Analysis.

Korean equity funds led all MPF categories, surging 74% year to date on a recovery in memory semiconductor pricing, robust artificial intelligence (AI) demand, and strong technology exports.

Meanwhile, China and Hong Kong equity funds lagged amidst concerns over economic growth and property markets, declining 6.5% and 3.2%, respectively.

Asia Pacific equity funds gained 35.4%, led by technology markets such as Taiwan and Korea, whilst Japan returned 19.9%, driven by corporate governance reforms and deeper integration into the global technology supply chain.

Global equity funds rose 12.5%, whilst US equities gained 11.6% as technology giants continued to drive earnings, though investors increasingly favoured companies with clear exposure to AI, cloud computing, and digital infrastructure.

Fixed income funds broadly declined, with Bond Global LC losing 2.5% and Bond Asia Pacific HC falling 2.3% year to date, as interest rate uncertainty and yield volatility weighed on returns.