Equity Funds Are High-Risk — Not for Short-Term Trading; At Least 70% in Stocks

“Stocks are rising — should I switch my MPF into equity funds?” The MPFA’s “Uncle MPF” says: MPF is a decades-long investment; short-term market moves barely affect overall long-run returns, so members shouldn’t chase momentary gains.

How risky are equity funds?

At least 70% of assets sit in listed stocks on approved exchanges. Equity markets are typically volatile, so equity funds carry higher risk than other fund types — suited to members with higher risk tolerance, such as the young with long investment horizons. The goal is long-term capital growth and beating inflation.

What kinds of equity funds exist?

Three main types: single-country, regional, and global. Single-country funds target one market (e.g. Hong Kong, the US); regional funds cover multiple markets (e.g. Asia, Europe); global funds spread across the world’s major markets. Some specialise by sector (e.g. healthcare), while index funds track individual market indices (e.g. the Hang Seng Index).

How to reduce risk?

Diversify. Consider spreading across equity funds in different regions, or keeping only part of your portfolio in equities with the rest in other fund types. Markets, economies and outlooks differ by region — research before choosing. Compare equity funds at MPF fund comparison.