5 MPF fund types explained, from conservative to MPF equity fund
2011-12-26
MPF is a cornerstone of retirement reserves for Hong Kong’s working population. Conservative funds, guaranteed funds, bond funds — what actually sets them apart? MPF offers five fund types, each with its own investment scope, charges and risk profile. Meet each of the five before choosing.
What are the five MPF fund types — and where does the MPF equity fund fit?
The five MPF fund types are conservative funds, guaranteed funds, bond funds, mixed-asset funds and the MPF equity fund. Investment rules differ by type: conservative funds must invest in Hong Kong-dollar assets, bond funds must hold at least 70% in bonds, and the MPF equity fund focuses on equities with higher risk — members should match their choice to personal needs and risk tolerance.
The five at a glance
| MPF fund type | Features | Risk |
|---|---|---|
| Conservative fund | Must invest in HKD assets such as short-term bank deposits and bonds; if a month’s return falls below the MPFA-published prescribed savings rate, the trustee may not charge admin fees that month | Lower; mainly interest-rate risk |
| Guaranteed fund | Invests in bonds, equities or short-term interest-bearing money-market instruments; guarantees come with conditions (lock-in periods, withdrawal terms) that must be fully met; extra guarantee or reserve fees apply | Lower; mainly credit risk; guaranteed rates can be adjusted or withdrawn |
| Bond fund | At least 70% in bonds or debt instruments issued by governments, public bodies, corporations or multilateral institutions like the World Bank | Low to medium; interest-rate, currency and credit risks |
| Mixed-asset fund | At least 70% in equities and bonds | Medium (depends on the equity-bond split) |
| MPF equity fund | At least 70% invested in equities, with higher return potential | Higher; market-volatility risk |
Match the fund to your risk appetite
Once you know the five MPF fund types, the next step is assessing your risk tolerance and investment horizon. For more on each type’s fees and performance, visit the MPF education hub.
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