Hong Kong's Mandatory Provident Fund lost 2.56% in October, according to research firm MPF Ratings, an investment loss of HK$43.1 billion that works out to about HK$8,671 for each of the system's 4.97 million members and cut its 2026 return to 3.48%.

The final figure, published on Wednesday, is far worse than the 1.54% loss the firm had estimated with data to Oct. 20. The selloff in technology stocks deepened in the last third of the month, and Asian markets, which carry heavy technology weightings, took the brunt. For Hong Kong workers, many of whom moved money into Asian equity funds during this year's rally, the month erased a large share of their gains.

October followed a 1.47% drop in September. MPF Ratings said it was the system's first back-to-back monthly decline since March and April 2025.

Two Trackers, Same Picture

Consultancy GUM reached almost the same result with its own index. The GUM MPF Composite Index fell 2.6% in October to 296.4, and the firm put the average loss per member at HK$8,677, according to financial news service etnet. GUM's equity fund index dropped 4% and its mixed-asset index fell 2.2%. Its fixed-income index rose 0.4%, making bonds the only asset class with a positive return for the month.

GUM's chief investment officer said the October decline was the largest since March. He attributed the slide to market concern that the huge capital spending on artificial intelligence may not produce matching returns, which hit global technology shares, according to etnet. Greater China, Asian and Hong Kong equity funds fell between 5% and 10%, GUM said, while a retreat in U.S. Treasury yields from their highest levels since 2007 helped bond funds. The regional damage matched what happened on exchanges: Capital Times reported that the Hang Seng and CSI 300 posted October losses as the AI selloff spread.

MPF Ratings pointed to the same two forces: fading optimism about AI and a sluggish Chinese domestic economy. It said Hong Kong and China equity funds are now the worst-performing MPF asset class of 2026 by a wide margin. Francis Chung, the firm's chairman, said the category gave up all of its year-to-date returns in a single month.

A Healthcare Fund Bucked the Slide

One corner of the system did well. The "Other Equity" category returned 8.56% in October, by far the best result of any fund category, MPF Ratings said. Almost all of that came from one product: Manulife's MPF Healthcare Fund, which rose 9.49% in the month and makes up about 90% of the category. Chung said the gain lifted the fund's 2026 return to just over 15%.

Chung used the month's swings to make a case for diversification. He said the MPF's default investment strategy funds, which spread money across asset classes and cut equity exposure automatically as members approach retirement, are "ideal to minimize uncertainty."

Gains for the Year Are Shrinking

The system remains ahead for 2026, though by much less than earlier in the autumn. MPF Ratings put the year-to-date investment gain at HK$53.9 billion, or HK$11,490 per member. GUM's estimate was HK$11,610 per member. The two firms use different indexes and calculations, so their per-member figures differ slightly.

Before the month's final week, MPF Ratings had estimated a 2026 gain of 4.57%, or HK$14,945 per member, as of Oct. 20. The final October numbers removed more than HK$3,400 per member from that estimate.

After contributions and investment results, total MPF assets ended October at about HK$1.644 trillion, MPF Ratings said, down HK$40.1 billion from the end of September. That equals an average account balance of HK$330,861, which the firm said is still the sixth-highest on record.

Chung warned that the calendar-year result is no longer secure. He said continued losses in November and December could leave the system with an annual loss, an outcome that looked unlikely in the first half. GUM's chief investment officer said the U.S. midterm elections, the Federal Reserve's December policy meeting and technology company earnings will continue to drive markets in November, and he expects short-term volatility to persist.

Both firms published mid-month estimates for October, and similar early readings for November would be the next data point. The Fed's policy decision is due in December, before the year-end tally that will show whether the MPF records a fourth straight annual gain.