MPF dips into the red for first half

The Mandatory Provident Fund, the retirement scheme that covers 2.4 million people in Hong Kong, reported a 0.56 per cent loss in the first half of the year, worse than putting money in the bank but beating the stock market's benchmark Hang Seng Index, which fell 8 per cent.

Most equity and bonds funds made losses, with the worst performers being China equity funds and the best ones, Japan equity funds.

Fund managers warn of a roller-coaster ride in the second half of the year.

The 458 MPF investment funds reported an average month-on-month loss of 3.24 per cent last month, bringing the average loss for the first half of the year to 0.56 per cent, according to data provider Lipper. That compares with a gain of 3.21 per cent in the first half of last year.

Almost all categories of funds suffered losses in the first half, with the exception of the most conservative money market funds, which invest in bank deposits, or equity funds investing in Japanese, United States and European stocks.

Japan equity funds were the best performers, with an average gain of 19.31 per cent, while US equity funds climbed 12.18 per cent and European ones rose 4.52 per cent.

China equity funds were the worst performers with an average loss of 12.58 per cent, followed by South Korean equity funds, which lost 12.04 per cent.