Image Source: Pixabay

Key Benchmarks Performance

Hong Kong’s Hang Seng Index continued rallying 2.9% in July and posted a remarkable 23.5% gain for the year-to-date (as of 2025/07/31). China Shanghai Composite Index also soared 3.7% in July and posted positive return of 6.6% for the year-to-date period. Most of ASEAN markets rebounded in July. Among all Asia markets, Thailand’s SET Index was the best outperforming market and rallied for 14% in July but still posted negative return of 11.3% for the year-to-date period, making it the bottom performing market of Asia region. Vietnam, Indonesia, Taiwan, Korea and Singapore posted positive return of 9.2%, 8%, 5.8%, 5.7% and 5.3%, separately, in July. US S&P 500 and the NASDAQ Composite Index hit a record high and posted positive returns of 2.2% and 3.7% separately. Korea continued posting an outstanding performance of 35.3% for the year-to-date period, while Hong Kong and Vietnam also outperformed and posted positive return of 23.5% and 18.5%, separately. Malaysia and Philippine were the underperforming market and posted negative return of 7.9% and 4.2%, or the year-to-date period, separately.

Table 1: Global Key Benchmarks Performance

(Click on image to enlarge)

Source：LSEG Lipper, as of 2025/07/31

Asset Types Analysis

The total 376 Hong Kong Mandatory Provident Fund (MPF) registered for sale in Hong Kong posted positive return of 1% on average in July of 2025 (as of 2025/07/31). Across all fund types, the average returns were 11.1% (YTD), 14.3% (1Y), 21.3% (3Y), and 18.6% (5Y). Equity funds outperformed other asset types, with a 1-month return of 2.2% and a YTD return of 16.7%. The 1-year and 3-year averages were strong at 23.5% and 31.7%, respectively. Over 5 years, equity funds also delivered the highest average return of 30%. Equity funds consistently delivered the strongest returns across all timeframes.

Hong Kong MPF Performance by LGC Analysis

There are overall 376 Hong Kong Mandatory Provident Fund (MPF) registered for sale in Hong Kong market with a total 24 Lipper Global Classifications. Among all 24 classifications, Equity Greater China, Equity Hong Kong and Equity China posted 4.2%, 3.4% and 3.2% on average, separately and took the leading positions among all MPF classifications in July. For the year-to-date (as of 2025/07/31), Equity Korea, Equity Hong Kong and Equity China posted an outstanding performance with an average return of 55.3%, 25% and 22.8%, separately while Equity Sector Healthcare was also one and the only sector posted negative return of 1.5%.

Figure1：Top/Bottom 10 Hong Kong MPF Performance by Lipper Global Classifications, July 2025

(Click on image to enlarge)

Source：LSEG Lipper, as of 2025/07/31, in Hong Kong Dollar

Figure2：Top/Bottom 10 Hong Kong MPF Performance by Lipper Global Classifications, Year-to-Date (as of 2025/07/31)

(Click on image to enlarge)

Source：LSEG Lipper, as of 2025/07/31, in Hong Kong Dollar

Outlook

The Hong Kong economy continued to expand solidly in the second quarter of this year, supported by strong exports performance and improved domestic demand. According to the advance estimates, real GDP grew by 3.1% over a year earlier, picking up slightly from of 3.0% in the first quarter. Analyzed by major GDP component, private consumption expenditure increased by 1.9% in real terms in the second quarter of 2025 over a year earlier, as against the decrease of 1.2% in the first quarter. Government consumption expenditure measured in national accounts terms recorded an increase of 2.5% in real terms in the second quarter of 2025 over a year earlier, compared with the increase of 0.9% in the first quarter. Gross domestic fixed capital formation increased by 2.9% in real terms in the second quarter of 2025 over a year earlier, following the increase of 1.1% in the first quarter.

Over the same period, total exports of goods measured in national accounts terms recorded an increase of 11.5% in real terms over a year earlier, accelerating further from the growth of 8.4% in the first quarter. Imports of goods measured in national accounts terms grew by 12.7% in real terms in the second quarter of 2025, compared with the increase of 7.2% in the first quarter. Exports of services rose further by 7.5% in real terms in the second quarter of 2025 over a year earlier, after the increase of 6.3% in the first quarter. Imports of services increased by 7.0% in real terms in the second quarter of 2025, compared with the increase of 4.7% in the first quarter.

Looking ahead, steady economic growth in Asia, particularly in the Mainland China, combined with the Government’s various measures to bolster consumption sentiment, attract investment, diversify markets, and promote economic growth, will continue to provide steadfast support for various segments of the Hong Kong economy. Nevertheless, uncertainties in the external environment remain elevated. The US’ renewed tariff hikes of late will exert pressure on global trade flows as well as its domestic economic activity and inflation. The uncertain pace of US interest rate cuts will also affect investment sentiment. Moreover, the “rush shipment” effect is expected to fade later this year. Hong Kong’s economic performance going forward will, to a certain extent, depend on how these factors evolve.

More By This Author:

India Is Walking On Eggs
U.S. Weekly Update – To Inflate or Not to Inflate: That is the Question
S&P 500 Earnings Dashboard 25Q2 - Friday, Aug. 15