The Mandatory Provident Fund's (MPF) performance returned to positive territory last month, with Asia (ex-Japan) equity taking over from Pacific Basin equity as the biggest contributor.
However, while reaffirming their positive outlook for the Asia-Pacific, market watchers warned the city's two million scheme holders against over-concentrating on the sector, citing regional political instability and rising oil price as potential downside factors.
The MPF posted an average gain of 1.98 per cent last month, up from a loss of 1.08 per cent a month earlier, according to a study by mutual fund information provider Lipper.
Among the 17 fund categories, Asia equity topped with a return of 6.11 per cent, outperforming second-placed European equity, which gained 4.44 per cent. Hong Kong equity ranked third with a 4.07 per cent gain. January's top performer, Pacific Basin equity, which covers funds invested in Southeast Asia, fell to fourth with 3.77 per cent growth.
Asia equity also ranked first in the three-month return category, posting a gain of 9.01 per cent, compared with European equity's 7.41 per cent return and Hong Kong equity's 1.84 per cent growth.
'The Hong Kong stock market suffered heavy losses at the turn of the year before recovering in the past two months,' Lipper research manager Karen Chan said. 'Overall, we still see a strong interest from fund managers in the stock markets of Southeast Asian countries such as Thailand, the Philippines and Indonesia.'
Hong Kong Investment Funds Association executive director Sally Wong echoed Ms Chan's comments, saying Asian stocks would continue to command the most attention from fund managers in the short term, given the region's growth potential compared with Europe and North America.
