Choosing MPF funds: how to pick resilient Asian funds in a downturn

August 2011’s crash battered MPF: European equity funds fell 10.98% and China equity funds 10.12% in a month, every equity category in the red. Convoy’s managing director Rosanna Choi said downturns demand smarter fund selection — she favoured Asia and advised avoiding the US and Europe, which she saw in a long slump.

How do you pick steadier funds in a downturn?

Look at two things: how the fund held up in past troughs, and the manager’s quality. Choi said fund selection should not rest on bull-market gains alone — bear-market defensiveness matters more, and a manager’s crisis track record is a key reference.

What is the smartest way to deploy new contributions?

Keep the old portfolio unchanged; park new contributions in conservative funds and buy Asian equity funds on dips. With the US and Europe facing a dim, drawn-out outlook, she advised steering clear of global, European and US equity funds for now; Asia’s rebound potential made it the better dip-buying target. When the time is right, cash parked in conservative funds can rotate into equities.

Those near retirement (2–3 years away) should gradually lift bonds to 70% and cut equities to 30% — but never in a rush, only trimming on rebounds. Compare Asian equity fund track records with MPF fund search.