Hong Kong MPF on course for a losing 2011 after 3.5% slide

Hong Kong workers have good reason to fret about retirement: their MPF savings looked set to end 2011 in the red. Speaking on 17 November 2011, 康禮賢, Asia-Pacific CEO of the asset manager 研富, said the global economy faced a gauntlet of challenges in the coming months and it was far from certain MPF could extend October’s rebound. Year to date, MPF returns were running at about -3.5%.

Will MPF returns end 2011 in negative territory?

By mid-November 2011, MPF was down roughly 3.5% for the year, putting a full-year loss firmly on the table. 康禮賢 expected no concrete resolution to the euro-debt crisis, predicted volatility would intensify, and warned equities could retest their August–September lows within weeks or months.

Where the manager is positioned

On allocation, 康禮賢 said the firm was adding mainland consumer names — especially high-end luxury stocks, whose valuations had become reasonable after the second-half sell-off from rich first-half prices. It stayed overweight industrials but was trimming financials and telecoms. Regionally, China was being lifted from underweight to neutral, Asian bonds were favoured, and US Treasuries were emphatically avoided — yields too low, risks too real.

The macro call: China easing on the way

He expected Beijing’s tightening to unwind gradually, with a reserve-requirement cut possible before year-end, pulling money back into equities — H-shares first, small and mid-caps likely to beat large caps. But until that pivot materialised, Europe’s debt gloom remained the biggest drag on MPF returns.

What members can do when MPF is losing money

A 3.5% loss stings, but MPF is a multi-decade marathon: after 2008 it also took time to recover. The worst move in volatile markets is panic-switching — every switch can lock in a paper loss. Rather than chase the rebound, check that your mix still fits your age and risk appetite. The MPF education hub has guidance on positioning through different market conditions.