Employee Choice: Only the Right Strategy Lifts Returns

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

The Employee Choice Arrangement (semi-portability) was never just about moving trustees — which one, which funds, and when decide returns. HSBC MPF’s Lee Man-yan offered three tips: with choice in hand, strategy is the decider. (The original report was published incomplete; this covers the surviving content.)

Move one: allocate by age

Attack young, defend old. Young members have time and can stomach volatility — higher equity weightings work. Near retirement, cut risk with more bonds and money-market holdings. Wrong allocation for your age wastes even the cheapest trustee.

Move two: keep contributing to average costs

Don’t time the market; rely on discipline. Monthly fixed contributions are dollar-cost averaging — buy more units when markets fall, fewer when they rise. Growing the pot isn’t about calling tops and bottoms; it’s about never stopping contributions.

Move three: execute with discipline

Write the plan down; don’t switch on emotion. Set an investment plan and stick to it — don’t shuffle funds on every market wobble. Fund-combination switches are unlimited, but more switching doesn’t mean more returns. Same-day switching and target-date funds are tools, not answers.

What is the lesson from 2012?

HSBC’s three moves from 2012 remain MPF investing basics. Semi-portability gave you choice, but choice doesn’t automatically become returns — asset allocation, disciplined contributions and emotional control are the bridge. Switching is easy; strategy is hard.