How to get the best MPF funds

Thinking about changing your MPF plan? The recently implemented portability scheme gives you some freedom to move. And, as you search through fund data, you will notice there is much to choose from. Funds can vary greatly in terms of their returns, fees and risks.

Lipper, a data firm owned by Thomson Reuters, does the ranking, comparing funds within their peer group using three criteria: total returns, consistency of returns and capital preservation. For example, it puts together all the Hong Kong equity funds in MPF, and measures which funds score highest for total returns (dividends, interest and capital gains). Returns are net of fees, which addresses a key complaint about MPF - high fees.

It also looks at the consistency of returns to ensure gains are more or less regular, month to month. This is an indicator of a fund's stability and ability to manage risk. The more regular, the better. Lipper also ranks funds on their ability to protect capital and to protect investors from big one-off losses.

The last two criteria (consistency and preservation) measure a fund's defensiveness or risk aversion, while the first (returns) is a measure of potential rewards. Money Post collated the Lipper data for the most recent month of review (September) to find the top funds for the main categories (see second table below).

Where a fund is labelled a "Leader", it is the top fund of that group. Otherwise, Lipper ranks funds from one to five, five being the best rating. A second table looks at returns within main fund categories (see table below).