Ms. Ka Shi Lau together with Mr. Bob Lee, shared statistics of the MPF simulation game, “BCT Alliance•MPF Game” and the investment outlook for 2021.
COVID-19 has accelerated the digitalisation progress across industries and the MPF space is no exception. BCT Group upholds sustainability in promoting digitalisation and innovation to create value for customers. In view of Hongkongers' general disregard for their MPF accounts, BCT Group has rolled out the first MPF simulation game, the "BCT Alliance • MPF Game"1, in Hong Kong from August to December last year to raise public awareness of MPF, as well as help scheme members take advantage of e-tools to manage their MPF and establish good investment habits. The game attracted a total of 4,000 participants, with an average return of 14%. Only 2% of participants consistently completed all e-tasks throughout. Participants who have continued reviewing market outlook and switching funds appropriately achieved better investment returns.
Despite disappointing usage of e-tools, professional and reliable information is helpful in choosing funds
The "BCT Alliance • MPF Game" had "e-tasks" designed to encourage participants to review their market outlook and e-statements on a monthly basis, as well as complete "BCT iPortfolio" 2 for extra scores. Only 2% of participants completed all the e-tasks, reflecting a low level of public interest in consistently using e-tools to manage MPF.
30% of participants kept track of the market outlook every month, making it the most performed task among all three "e-tasks". The average return of these players was 15%, slightly higher than that of all participants (14%). Another 20% completed "BCT iPortfolio", in which 80% of them had a risk level in the risk assessment questionnaire, similar to the risk-weighted level of their portfolio. This proves that "BCT iPortfolio" plays a positive role in helping participants choose funds.
While equity funds are popular, switching funds appropriately can achieve a better return
Equity funds were sought after by most of the participants of the game in order as follows: China and Hong Kong Equity Funds, Global Equity Funds and World Equity Funds. It is worth noting that the number of fund switches has an impact on returns. 35% of all players switched funds 1 to 3 times during the game. They achieved a higher-than-average return of 15% or above, which was much higher than that of those who switched funds 4 times or more. This suggests that timely portfolio adjustments are beneficial to boosting returns while focusing too much on short-term volatility and frequent fund switching may backfire.
Ms. Ka Shi Lau, Managing Director & CEO of BCT Group, said, "The 'BCT Alliance • MPF Game' is an important step for us to promote investor education and encourage the public to actively manage their MPF with e-tools. When it comes to MPF management, Hongkongers generally either pay little attention to it, or they start off with a bang but gradually end up with a whimper. So, in order to build a sustainable future, we will continue to provide timely investment information and investor education, as well as a diversified range of simple and easy-to-use e- tools to make MPF management easier, faster and more precise. Meanwhile, we will prepare ourselves for the eMPF to embrace a new digital era of MPF together with employers and members."
Asia and emerging markets to lead global economic recovery
Regarding the global investment outlook for 2021, Mr. Bob Lee, Chief Business Officer of BCT Group, stated, "The current full-scale mass production of COVID-19 vaccines can conduce to the recovery of global real economy. Geographically, we are optimistic about Chinese, Asian and Japanese equity markets. With the spread of coronavirus better contained, the recovery in Asia is likely to lead the European and American markets. A weaker U.S. dollar will also have a positive stimulus effect on the asset performance of emerging markets. Besides, the favourable policies rolled out by governments and central banks will continue to support risky assets. Yet credit is preferred to government bonds. Amid multiple market focuses, members should manage their risks better to strive for success while maintaining stability."
1. Each participant of the "BCT Alliance•MPF Game" start off with virtual MPF assets of HK$200,000 in his/her game account and is given virtual MPF contributions of HK$5,000 each month between September and December under the "Default Investment Strategy (DIS)". Participants are then free to change their investment instructions to invest their funds and contributions in any constituent funds under the available MPF scheme in the game. In addition to MPF investments, participants are required to perform "e-tasks" during the game period, including (1) completion of "BCT iPortfolio", (2) review of monthly e-statements and (3) review of monthly market outlook. The total score is calculated based on the investment return (70%) and e-task score (30%).
2. "BCT iPortfolio" provides market risks and fund performance data over the past 8 years. Market views are updated with the help of fund managers on a regular basis to reflect market changes of various types of assets. It also performs return optimisation calculation through computer systems to construct simulated global investment allocation portfolios of different risk levels for investors' reference when selecting funds. When members complete the risk assessment questionnaire, "BCT iPortfolio" will show model portfolios suited to their different risk levels to help them make informed investment decisions.