August 2011’s global sell-off left MPF fund categories as follows (source: Thomson Reuters Lipper):
| Fund category | August return |
|---|---|
| Bond | +0.97% |
| Equity | -8.81% |
| Mixed asset | -4.97% |
| Money market | 0.00% |
| Guaranteed | -0.61% |
| Average | -5.27% |
Why were bond funds the only positive category?
Safe-haven flows into bonds. August’s US downgrade and worsening European debt crisis sent global money fleeing equities into bonds, making bond funds the sole positive category. Money-market funds were flat; guaranteed funds dipped 0.61%.
What does one month’s data teach?
The value of diversification. Equity funds could fall nearly 9% in a month, but mixed-asset funds with bond exposure limited losses to about 5%. MPF is a long-term investment — holding different asset classes cushions downturns.
To compare long-term returns across fund types, use MPF fund search.
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