August crash: MPF loses 5% as each member loses over HK$8,000 on average

In August 2011 the Hang Seng plunged 1,905 points and MPF fell 5% on average — its worst month since the October 2008 financial tsunami, costing each member over HK$8,000 on average. Analysts warned unresolved US and European uncertainties made a full-year loss likely.

How bad was the damage?

Lipper data showed MPF down 5.27% in August, the second-worst monthly fall since October 2008’s 12.2%. In the first eight months of 2011, MPF was down 3.58% cumulatively; on end-2010 net assets of HK$365.4 billion, nearly HK$13.1 billion evaporated — about HK$6,000 per member across 2.522 million participants. August alone wiped out HK$20.26 billion, over HK$8,000 per person.

Which funds were hit hardest?

Equity funds, down 8.81% on average. The US sovereign downgrade and slowing growth sent global markets on a roller-coaster; equity funds bore the brunt, trailing all other categories.

Is there still hope for MPF?

MPF is a decades-long investment — one month’s, even one year’s, volatility should not derail the plan. Rather than panic, review your mix: younger members can carry higher equity weightings, while those near retirement should shift gradually conservative. Check your funds’ resilience in downturns with MPF fund search.