Hong Kong's Mandatory Provident Fund (MPF) suffered a 9.01 per cent loss in the third quarter, its worst quarterly performance in four years, according to a private survey by Thomson Reuters Lipper. The third-quarter loss was the biggest of its kind since the July-September quarter of 2011, when the pension fund lost 12.11 per cent as the European sovereign-debt crisis rattled global markets. It was also the fourth-largest quarterly loss in the MPF's history, said the head of Asia-Pacific research for Thomson Reuters Lipper, Xav Feng. "With the uncertainty over the US Federal Reserve raising interest rates for the first time in nearly a decade, following a huge correction for China's equity market, it has triggered a big panic for global markets and dragged down the MPF's performance dramatically in Q3," Feng said. Nevertheless, the retirement fund still outperformed the Hong Kong stock market's benchmark Hang Seng Index, which slid 20.6 per cent in the third quarter, also logging its worst quarter in four years. Last month alone, the MPF lost 1.73 per cent, recovering from a 5.61 per cent loss in August, as markets stabilised after the "big correction" in Chinese markets and the Fed's September decision to keep interest rates on hold, Feng said. The MPF has lost 7.79 per cent in the past six months and 5.42 per cent in the first nine months of the year. Among the 481 MPF investment funds, most categories suffered losses in the third quarter. The only category recording slight gains was Hong Kong dollar bond funds, which were up 0.3 per cent. China equity funds were the top underperformers, losing an average of 24.22 per cent. Greater China equity funds came second on the list, losing 19.99 per cent in the same period. About 40 per cent of the HK$500 billion under the MPF scheme is invested in mixed-asset funds, 39 per cent in equities and the rest in conservative funds, bond funds and money market funds, according to Mandatory Provident Fund Schemes Authority data.
