A new MPF fund type: 2012’s first renminbi/Hong Kong-dollar fund

This article is a rewrite of a report from July 2012.

Era analysis: The original was a brief item announcing Sun Life’s July 2012 launch of the Sun Life MPF RMB and HKD Fund under its Rainbow scheme — the first provider to bring renminbi opportunities into the MPF fund line-up. Short as it was, it captured a moment: renminbi internationalisation was taking off, and even long-horizon retirement savings wanted a slice.

The design was bold yet cautious: targeting long-term total return mainly via renminbi- and Hong Kong-dollar-denominated money-market and debt instruments, with 60–70% of net assets denominated and settled in renminbi and the rest in Hong Kong dollars. One caveat: the fund itself was still priced in Hong Kong dollars, not renminbi — members held no direct renminbi assets; currency exposure came indirectly through the structure.

Invesco managed the fund. With renminbi products proliferating, the launch showed providers reaching for new MPF fund types to stand out ahead of the Employee Choice Arrangement, courting members keen to diversify currency risk.

Seen today, money-market constituent funds of this kind never went mainstream — but the item records the peak of 2012’s renminbi-appreciation fever.