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Mandatory Provident Fund (MPF)

Hong Kong and China stocks funds best performers for city’s MPF pension scheme last month

The average return of the stock funds was better than that of the benchmark Hang Seng share index, while the second-best performers in August were mixed assets funds, research firm says

PUBLISHED : Friday, 08 September, 2017, 9:16pm
UPDATED : Friday, 08 September, 2017, 9:15pm

Funds invested in Hong Kong and China stocks generated the best returns in August among all asset classes for Hong Kong’s Mandatory Provident Fund pension scheme and their average returns were better than that of the Hang Seng Index, pension research provider MPF Ratings said on Friday.

In August, all asset classes in the MPF scheme produced positive returns, MPFR said in its monthly survey of the scheme’s performance.

The best performer was the Equity Fund (Hong Kong and China), which consists of 69 fund classes, and recorded an average monthly return of 2.78 per cent in August. During the month, Hong Kong’s benchmark Hang Seng Index rose 2.37 per cent.

The second best performer was Money Market Fund, which had a return of 1.43 per cent, followed by the Mixed Asset Fund (81-100), which gained 1.16 per cent.

Equity funds primarily invest in stocks traded mainly on stock exchanges, while the Money Market Fund invests in short-term, high-quality interest-bearing securities and the Mixed Asset Fund invests in a mix of equities and bonds. The (81-100) designation in its name means the fund has between 81 per cent and 100 per cent of its assets invested in equities.

In the first eight months of this year, the Equity Fund (Hong Kong and China) has generated a return of 29.78 per cent, also beating similar funds. The Hang Seng Index gained 27 per cent over the same period.

The survey showed dispersion of fund returns was at an all-time low, which reflected “more consistent returns” for MPF members, MPFR said.

However, among the funds that had been in the top quartile of their respective categories in July, only 57 per cent of them remained at the top in August, MPFR added.

The MPF, a compulsory retirement saving scheme for Hong Kong employees, had total assets under management of HK$701.17 billion (US$89.7 billion) as of the end of March.