How Did MPF Weather 2010’s Roller Coaster?

What did MPF endure in 2010?

MPF rode a roller coaster in 2010: the European debt crisis and slowing global growth dragged first-half returns down 4.82% — the fourth-worst half-year since launch — with equity funds down 8.13% on average; then talk of US QE2 and easing mainland tightening fears lifted bonds, stocks and commodities, leaving full-year returns at +4.91% by November. European funds stayed trapped all year with losses across the board; Hong Kong equity funds rose over 10% in the first 11 months, beating Greater China funds’ ~8% and the Hang Seng’s 5.56%.

Did 10-year returns beat inflation?

Financial Services Bureau data showed nearly 2.5 million employees and self-employed in MPF by September 2010 with HK$345.7 billion in assets; net of fees, the 10-year annualised return was about 5.1%, above inflation.

How to position for 2011?

Gain Miles’ Yvonne Siu suggested equity funds for inflation-beating returns but “beyond Greater China” into broader Asian equities to diversify policy risk, without going over-conservative on bonds. Compare funds at MPF fund comparison.