MPF comparison done right: only compare like-for-like funds

This MPFA education column continues its series on building a habit of regularly reviewing your MPF portfolio. After covering why reviews matter and the basic concepts last time, this instalment tackles a practical question: when members want to adjust their personal MPF mix, how should they run an MPF comparison to pick funds that suit their life stage and risk tolerance?

What is the right way to do an MPF comparison?

The first step of any MPF comparison is understanding each fund’s investment objectives, policies, markets and risk level, and pinning down the switching goal. Even funds in the same conservative, balanced or aggressive bucket come in different varieties; fees and past performance must be compared against funds of the same nature, or no sound investment decision is possible.

Same bucket, different risks

• Equity funds range from global-market themes to single-market plays to index funds tracking specific markets — each carries different risk.
• Mixed-asset funds vary in their equity-bond splits.
• Bond, conservative and capital-preservation funds may all sit in the conservative camp, but their natures — and risks — differ.

Compare like for like

Shortlist suitable fund categories first, then pick the ones matching your life stage and risk tolerance across those four dimensions. To revisit the basics of portfolio reviews, see the MPF education hub.