Hong Kong’s public pension fund is on track for a paper loss of about HK$43.4 billion ($5.6 billion) this month after the escalating trade conflict hammered global stocks.

An estimated 3.2 percent decline in April puts the Mandatory Provident Fund (MPF) on course for its worst performance for the first four months since 2022, according to research firm MPF Ratings Ltd.  

READ MORE: Leveraging MPF for nonretirement purposes requires broad consensus

Hong Kong and mainland equities are the worst-performing asset class for the pension this month, with a 7.1 percent decline.

Hong Kong’s benchmark stock index has dropped more than 5 percent this month while the S&P 500 has slid more than 2 percent, after US President Donald Trump unveiled a range of sweeping tariffs on April 2, upending global trade and raising concerns about a recession.

“He thought it was a good idea, markets did not,” MPF Ratings Chairman Francis Chung said in a statement Friday.

ALSO READ: MPF reform promises to strengthen HK’s social safety net

Introduced in 2000 to prepare for a rapidly aging population, the MPF mandates participation for most employees in the city. The fund has about 4.8 million contributing members and HK$1.3 trillion in assets.