bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

sponsorType

authorLocations

authors

paywallTypes

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

factSheets

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

copyrighted

customTimezone

liveContents

Enoch Yiu

Pension fund investment returns bounced back last week, thanks to global stock markets stabilising after the terror attacks in the United States.

Most of the 290 Mandatory Provident Fund (MPF) investment funds reported better returns last week compared with late last month after the attacks, according to a Hong Kong Investment Funds Association survey released yesterday.

The MPF, which began in December last year, is a compulsory retirement scheme covering two million employees in Hong Kong.

All employers and their employees must each pay 5 per cent each of a staff member's monthly salary to the investment fund under the MPF plans. The two million employees covered receive the contribution plus investment returns when they retire at 65.

Investment returns of the 290 funds have been disappointing due to volatile stock market performances in the first half of the year. Most fell further after the worldwide stock market slump following the attacks on New York and Washington on September 11.

However, MPF funds showed a slight rebound last week.

According to the survey, the average year-to-date returns to October 5 of the MPF lifestyle funds - which invested in stocks and bonds - was at minus 23.67 per cent.

This compared with the year-to-date returns to September 21 showing an average of minus 29.52 per cent.

For global equity funds, they showed an average of minus 21.1 per cent on October 5, compared with minus 26.47 per cent on September 21.

The strongest rebound came in European equities funds, which recorded an average minus 24.6 per cent return by October 5, compared with minus 33.31 per cent on September 21.

Douglas Naismith, chairman of the association's pension sub-committee and also senior director of US fund house Fidelity Investments, said the global stock markets showed panic selling after the attacks, which hit the performance of the MPF funds hard as many had been invested into stock markets worldwide.

The Hang Seng Index fell 8 per cent the day after the attacks, but it bounced back last week as Hong Kong followed the US and cut interest rates by 50 basis points to boost the economy. Other stock markets also have improved since then, he said.

'With the global stock markets stabilising during last week, the pension funds in Hong Kong also have reported a better performance,' Mr Naismith said.

He said not many employees had switched their MPF investment portfolio and investors were taking a wait-and-see approach.

Graphic: mpf12gbz



Stabilising global markets help fuel strong rebound in fund returns