MPF Fund Performance Fell Nearly 8% in 2011: 11-Year Average Return About 2% a Year

On 21 December 2011, MPF’s 2011 report card was out: for the year to end-November, MPF had lost nearly 8%. It was the fourth losing year in the scheme’s 11-year history — and the second-worst drawdown ever, behind only the 2008 financial crisis.

Why did MPF fund performance fall nearly 8% in 2011?

MPF fund performance lost nearly 8% in the year to November 2011, mainly because turbulent European and US markets dragged down equity funds — five of the six fund categories ended in the red. Over the full 11 years, though, MPF still delivered total returns above 20%, or about 2% a year; the four losing years were 2001, 2002, 2008 and 2011.

2011 performance by fund type (year to end-November)

As of September 2011, MPF assets totalled about HK$337 billion across 2.33 million members. Looking back over 11 years, equity funds led with 30% cumulative returns, mixed-asset funds followed at 25%, and money market funds trailed below 1% — high risk, high return still held over the long run. Interestingly, members were increasingly favouring equity funds that year, apparently hoping to buy the dip.

To compare long-term fund performance, browse MPF funds.