The latest data from the Hong Kong Investment Funds Association shows that as of January 2024, 12 out of the 26 Trillions of MPF fund categories have achieved positive returns in the past 12 months. The stock markets in the United States and Japan have repeatedly hit new highs. Japanese stock funds top all Trillions of MPF fund categories, with a 21.9% increase in the past 12 months, followed by US stock funds and global stock funds. On the contrary, the stock markets in Mainland China and Hong Kong continue to weaken, with the average decline in Hong Kong and Mainland China stock funds being 30.8% and 30.1% respectively. Co-Chairman of the MPF Retirement Committee of the Investment Funds Association, Benjamin Chiu, pointed out that Hong Kong and Mainland China stock funds have dropped by half in the past 3 years, with declines of 49.9% and 53.4% respectively. Under the Trillions of MPF system, members regularly make contributions, and the dollar cost averaging strategy has been applied in practice. Assuming the dollar cost averaging method is used, the cumulative decline in Hong Kong and Mainland China stock funds over 3 years narrows to 28.1% and 28.7%. Chiu stated that he does not agree with completely avoiding investing in local related funds due to the poor performance of individual markets in the past, emphasizing that the Trillions of MPF is a long-term investment and advising members to diversify their investments in order to increase the stability of their portfolios. He also pointed out that although the prospects of the Mainland and Hong Kong stock markets are uncertain, they still have investment value because one can never know when the market will rebound. Chiu predicted that the market will continue to fluctuate in the Year of the Dragon, with uncertainties in economic growth, interest rates, and geopolitical events affecting market performance, and the US presidential election in November will further intensify the uncertainties. However, the US economy is still doing well, and the local market trend will depend on factors such as inflation and the number of interest rate cuts. He expects the US to cut interest rates about 3 times this year and recommends paying more attention to bond funds, particularly US bond funds which are more attractive. In addition, the implementation of the Cross-boundary Wealth Management Connect 2.0 is set to take place on the 26th of this month. The Chief Executive of the Association, Cindy Wong, mentioned that Wealth Management Connect 2.0 will increase the variety of optional investment products, including equity and mixed funds, describing it as a significant step to meet the asset allocation needs of residents in the Greater Bay Area. She stated that it is difficult to estimate the scale of incremental funds after implementation initially, as there are different licensing and registration systems in the two regions, and Hong Kong practitioners still cannot promote their services in Mainland China. It is hoped that version 3.0 will make improvements in this area, and the Association is actively discussing with regulatory authorities and suggesting that pilot programs be launched in individual cities initially to allow Hong Kong practitioners to engage in promotion and education activities locally.