MPF funds yielding returns less than inflation

The returns on almost a third of the 550 funds offered by 15 Mandatory Provident Fund providers did not cover inflation in the past year, a Federation of Trade Unions study has found.

The union also found that the returns for 89 per cent of the funds in the past five years were less than the average inflation rate of 3.1 per cent, while, in the past decade, a fifth of funds failed to surpass average inflation of 1.86 per cent.

In the year to July, the fund that generated the highest average return - 42.08 per cent - was an equity fund from MassMutual, while a global bond fund offered by Sun Life performed worst, incurring an average loss of 2.46 per cent.

For 31.42 per cent of MPF funds, the returns to July were less than the inflation rate of 4.2 per cent in the past year, the union found.

"For most Hong Kong people, all they want from their MPF investments is that the returns meet inflation. That's all they want," union lawmaker Bill Tang Ka-piu said.

The MPF is a retirement scheme that covers 2.4 million people in the city.