MPF fund performance: the 11-year record to November 2011

With only a few trading days left in 2011, the full-year scorecard was not yet out — but this interim report to end-November told the story: eleven years in, MPF’s cumulative average return was 20.47%, with equity funds the long-term winners. The single year of 2011, though, was a washout almost across the board.

How did MPF fund performance compare over 11 years?

As of 30 November 2011, MPF schemes had run eleven years with a cumulative average return of 20.47%, per Morningstar data. Equity funds were the star performers, up 30%, followed by mixed-asset funds at 24.89%, while money market funds managed just 0.94%. The 2011 year itself was deep in the red: minus 7.28% for the first eleven months.

*As of 30 November 2011, Morningstar via industry data, not annualised.

2011: from seven-up-three-down to eight-up-four-down

Excluding 2011, MPF had posted gains in seven of ten years, with the 2008 financial crisis the worst loss. 2011 was set to become the second-worst year: Greater China equity funds plunged 22.58% in the first eleven months, while Asia ex-Japan and Hong Kong equity funds fell 14.33% and 21.94%. Ironically, the US market — written off at the year’s start — outperformed, with US equity funds down just 1.1%.

Advisers at the time urged members far from retirement not to switch entirely out of equity funds in a downturn, which would only crystallise paper losses. For the characteristics of each fund type, see the MPF education guides.