Hong Kong’s Mandatory Provident Fund (MPF) achieved its third-best interim performance as a rally in Chinese stocks this year improved returns and helped lift total assets to the highest level since its inception in 2000.

Managers overseeing 379 investment funds under the compulsory retirement scheme generated a combined HK$115 billion (US$14.6 billion) of income from January to June this year, according to MPF Ratings, an independent research firm. That was equivalent to HK$24,100 for each of the 4.8 million MPF members.

The funds earned 8.9 per cent on average during the first half versus a 5.2 per cent return a year earlier, a result surpassed only by 10.4 per cent in 2019 and 9.9 per cent in 2017. MPF assets grew 10.6 per cent to HK$1.429 trillion as of June 30, aided also by new contributions from its members.

“The market rally was strong, as the effect of the US-China tariff war was not as bad as feared,” said Kenrick Chung, chief corporate solutions officer at Bay Insurance Brokers in Hong Kong. “The US-China tariff war also led investors to shift from US assets to different markets, including China and other Asian markets.”

Chung added that new listings in Hong Kong also provided great profit opportunities for MPF managers. Initial public offerings (IPOs) soared eightfold to US$13.5 billion in the first half, propelling Hong Kong’s stock exchange to the top of the global rankings for the first time since 2019, according to data from the London Stock Exchange Group.

Funds investing in Hong Kong and China stocks returned 18.5 per cent in the first half, the best among the fund types. Those focused on European equities earned 15.8 per cent, while balanced funds with global stocks and bonds delivered 13 per cent, according to MPF Ratings.