MPF fund performance rebounds 4.9 per cent in January 2012

After a bruising 2011, Hong Kong’s MPF opened 2012 on the front foot. According to data provider Lipper, as of early February 2012, the MPF’s 429 registered funds posted an average return of 4.9 per cent in January 2012 — one of the best January showings on record. The Hang Seng Index surged nearly 2,000 points (10.6 per cent) in the same month, its strongest January since 1996. MPFA figures put total MPF assets at about HK$336.9 billion as of end-September 2011, covering 2.5 million employees — implying paper gains of more than HK$16.5 billion for the month.

How is MPF fund performance measured?

MPF fund performance measures how much an MPF fund’s assets grow over a given period, usually expressed as a percentage. In January 2012, MPF funds averaged a 4.9 per cent return, with equity funds up 7.39 per cent and bond funds up just 1.71 per cent — a reminder that performance hinges on fund type and market conditions, not a single headline number.

January 2012 returns by fund type

The previous year’s worst casualties — China and Korea equity funds — bounced hardest with double-digit gains, while defensive bond, money-market and guaranteed funds lagged.

One good month does not make a good year

Analysts cautioned that Europe’s debt crisis was far from resolved, with Greece, Italy and Spain still mired in debt, and that the rally rested on central-bank liquidity and better US data. A brokerage director noted that whether the improved mood would last depended on annual results due in the coming weeks.

The MPF is a long-term investment: a strong month is no promise of a strong year. Members can compare fund track records and fees in the MPF education guides before deciding whether to adjust their portfolios.