Back in 2011: RCM added two new MPF constituent funds in a single day

Back in October 2011, Hong Kong’s MPF market had no default investment strategy, and members were left to pick funds entirely on their own. It was an era that prized sheer choice — and on 30 September 2011, RCM announced it was adding two constituent funds at once to its MPF master trust scheme: the “RCM Greater China Fund” and the “RCM Oriental Pacific Fund”. The notice ran barely a hundred words, yet it captured the MPF landscape of its time.

Why were trustees launching new funds so aggressively?

Competition was the answer. With no employee choice arrangement yet in place, members could not even switch trustees, so providers competed partly by lengthening their fund menus. Regional equity funds — Greater China and Asia-Pacific ex-Japan — were the hot categories of 2011: the China growth story was at its peak, and fund houses were happy to package it as the newest product on the MPF shelf.

What does this announcement tell us today?

The notice itself carried no performance figures or fee data, so its value now is purely historical. Still, it offers two reminders. First, more funds do not mean better choices: the MPFA later concluded that an overcrowded fund menu left members paralysed, a problem the default investment strategy was eventually designed to solve. Second, a new fund is not necessarily a new opportunity — regional equity funds are highly volatile, as the Greater China equity category’s crash of more than 20% in Q3 2011 demonstrated.

To compare today’s MPF funds by fees and performance, use the MPF fund comparison tool.