Recently, MPF advisory firm GUM released its MPF report card for the third quarter of 2026.

Based on its estimates, fund switching volume (cumulative monthly) for the first eight months of this year totaled approximately HK$49.8 billion. If extrapolated at this pace, full-year switching volume could reach HK$74.7 billion, an increase of about 25.5% from HK$59.5 billion for the full year of 2025, and is expected to set a new 5-year high.

GUM attributes the growth in fund switching volume to two main factors: first, all MPF schemes have now been onboarded to the eMPF Platform this year, making switches more convenient; second, return disparities across different asset classes have widened. For example, Asian equity funds have returned 24.3% year-to-date, while Hong Kong equity funds have declined 3.8%. More and more members are recognizing the importance of actively managing their MPF.

All MPF schemes in Hong Kong fully joined and officially connected to the eMPF Platform in April this year. Members must first register and activate their eMPF accounts, after which they can manage their MPF online, submit fund switching instructions, and consolidate personal accounts.

Year-to-date, US equity funds recorded estimated net inflows of approximately HK$12.1 billion, continuing to be a popular choice among MPF members; Asian equity funds and Japanese equity funds also recorded net inflows of approximately HK$3.7 billion and HK$1.2 billion respectively. The three combined attracted about HK$17 billion, reflecting how the AI/chip wave has driven US, Japanese, and Korean stock markets, encouraging members to actively position themselves.

Within mixed asset categories, two Default Investment Strategy (DIS) funds combined recorded net inflows of approximately HK$10.9 billion, but mixed asset funds (20% to 100% equity) saw net outflows across the board, totaling approximately HK$12.5 billion.

Hong Kong equity funds (including index-tracking) recorded net outflows exceeding HK$10 billion year-to-date, primarily because Hong Kong equity constituents are mostly traditional tech companies that have not benefited from the AI/chip wave.

GUM noted that year-to-date as of September 30, the GUM MPF Composite Index stood at 304.2 points, up 6.2%; the average member gained HK$20,287.

GUM Chief Investment Officer Lau Ka-hung stated that until the end of this year, he is not optimistic about A-share and H-share performance, expecting the fourth quarter to remain stable with full-year MPF returns of approximately 6% to 7%.

MPF rose 0.5% in the third quarter, recording positive returns for two consecutive quarters; within the quarter, July and August rose 0.5% and 1.5% respectively, but September fell 1.5% dragged by factors including Federal Reserve and HKMA rate hikes and elevated US Treasury yields, with average member gains of HK$1,762 in the third quarter.

Among asset classes, Asian equity funds delivered the best year-to-date performance with returns of 24.3%, mainly benefiting from strong demand for AI infrastructure, memory, and semiconductors, though the third quarter saw a 2.8% decline due to a semiconductor stock pullback triggered by AI valuation concerns in July.

Hong Kong equity funds posted the worst year-to-date performance, declining 3.8%, mainly because revenue growth slowed for the larger-cap traditional tech companies in the Hang Seng Index, coupled with downward earnings revisions and a lack of AI infrastructure theme support, which pressured performance; however, Hong Kong stocks strengthened in July, with Hong Kong equity funds (index-tracking) delivering third-quarter returns of 8.3%, the best-performing fund category in the quarter.

Notably in the third quarter, the Federal Reserve raised the federal funds rate target range from 3.5% to 3.75% to 3.75% to 4% in September, the first rate hike since 2023, with the Hong Kong Monetary Authority raising rates in tandem. Rising interest rates pressured bond prices, with global bond funds and HKD bond funds declining 3.0% and 2.5% respectively year-to-date; conversely, elevated interest rates benefited MPF conservative fund returns, with that category recording a stable positive return of approximately 2.0% over the past 12 months, while global bond funds fell 3.1% over the same period.

Regarding how MPF members should deploy their funds in the fourth quarter, GUM Chief Investment Officer Lau Ka-hung offered the following recommendations for three types of investors with different risk profiles: high-risk investors may consider allocating to global equity funds, as the US dollar index has regained the 100 level, potentially drawing capital flows into US dollar assets, and many AI-related companies are listed in the US, positioning them to benefit directly; medium-risk investors may consider allocating to DIS Core Accumulation Funds and appropriately diversifying across different markets; low-risk investors may consider allocating to MPF conservative funds, as elevated interest rates benefit conservative fund returns with lower volatility.