Investment advisers and fund houses are recommending investors take a close look at their portfolios with a view to increasing equity exposure after a strong second-quarter performance for mutual funds.
Equity funds delivered higher returns in the second quarter than all other funds registered with the Securities and Futures Commission, rising an average 18.19 per cent against a gain of 14 per cent across all asset classes, according to the latest data from Standard & Poor's.
Fixed-income funds rose 6.32 per cent over the period, with balanced funds edging up 11 per cent.
Hong Kong's compulsory pension system, the Mandatory Provident Fund, reported an average gain of 6.42 per cent in the first half of the year. MPF equity funds had their first positive performance since their launch in December 2000, rising an average 13.11 per cent. Funds remain an average 7.11 per cent lower since inception, according to figures from the Hong Kong Investment Funds Association.
'Retirement funds have recorded a very strong quarter's performance supported by resurgent equity markets that have had their strongest showing since the final quarter of 1998,' said Mark Konyn, director at Allianz Dresdner Asset Management (Adam).
'We are encouraging our investors to reassess their current allocation and try to take into account that bonds are likely to not deliver the same level of performance and are likely to be more volatile in the coming period. We are expecting a continuation in this better environment for equities.'