Last-day 416-point rally lifts first-half MPF gains to HK$4,441 per member

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

MPF dodged the June curse: after EU leaders agreed to use the European Stability Mechanism to recapitalise banks, Hong Kong stocks surged 416 points (+2.19 per cent) on the month’s final trading day, ending the first half up 1,007 points (+5.5 per cent) and lifting MPF returns. June gained 2.37 per cent, the first half 3.21 per cent — about HK$4,441 per member account.

First-half performance by category

(Source: Lipper, June 2012; total assets HK$356.035 billion, ~2.573 million members)

What was the second-half outlook?

Lipper’s Hong Kong research head said the EU summit measures treated symptoms, not causes — helpful for a July rebound but leaving the debt crisis unresolved. With the US election aftermath and Iran adding uncertainty, equity markets looked set to stay volatile in the second half.

An MPF business development director at a financial advisory firm reminded members that MPF is long-term: don’t chase short-term swings. Younger members could direct new monthly contributions to long-term growth funds like Asian equities, while shifting profitable accumulated contributions into bonds to lock in gains.

Using the same Lipper dataset as companion reports, this story’s angle was the drama of the last-day rescue and the forward outlook.