The city's Mandatory Provident Fund (MPF) reported lower returns in the past two months, although hot money inflow, which boosted third-quarter results, helped it stay in the black.
The 443 retirement funds, which cover 2.5 million employees in Hong Kong, returned only 1.24 per cent in November and 0.67 per cent in October, month on month, according to data provider Lipper.
The funds reported a strong 4.66 per cent gain in July to September, recovering from a 3.64 per cent loss in the second quarter. The rebound in the third quarter was mainly the result of September's monetary easing in the United States, Europe and Japan, which boosted stock markets worldwide.
In the first 11 months of this year, the pension funds have returned 10.15 per cent. Despite being a strong performance, it still does not measure up to the Hang Seng Index, which gained about 18 per cent during this period.
Mixed-asset funds, which invest in a combination of bonds and stocks and are the most popular fund choice representing almost half of all MPF assets, returned 1.18 per cent in November and 0.35 per cent in October, down from 4.75 per cent in the third quarter.
Equity funds, the second-most popular MPF vehicle accounting for 35 per cent of all fund assets, returned 1.88 per cent in November and 1.23 per cent in October - down from 6.52 per cent in the third quarter.
Bond funds returned 0.27 per cent in November and 0.01 per cent in October, compared with 2.44 per cent in the third quarter.
"We continue to face challenges on the global scene, which will result in volatile performances," said Rex Auyeung Pak-kuen, Asia president of US pension and investment fund operator Principal Financial Group.
"With the US election settled, which has given the market some direction to follow, we now have the fiscal cliff to gauge. Combined with the projected 7 per cent growth of China, a still unclear EU [situation] plus the recent developments in the Middle East, the market will continue to be bumpy into 2013."
Mark Konyn, chief executive of Cathay Conning Asset Management, said while the US monetary easing policy had helped stock markets, November's MPF results were affected by near-term uncertainties.
"With the potential improvement in China's economy … MPF performance should retain some momentum into 2013. However … investors should maintain a balanced strategy focused on longer-term results."