MPF gains 6.6% in October, but analysts warn the full year may end in the red

MPF funds gained 6.6% in October 2011 on equity funds’ 10%+ rebound: Hong Kong, Greater China and China equity rose 12%–16%; mixed-asset funds returned 6%, beating bond and guaranteed funds’ roughly 1%. But January–October still averaged -5%: equity funds fell 10%, Greater China and Korea funds dropped 15%–16%, Hong Kong and China equity lost 14%; mixed-asset funds averaged -4%, while bond funds stayed up 4%.

Why do analysts fear a full-year loss?

The euro-debt crisis injected huge uncertainty, and analysts worried the full-year MPF tally would end “in the red”. October’s bounce rested on rescue-plan hopes, but Greece stayed volatile and EU divisions unresolved — one month’s gains could be reversed by external shocks at any time. In a year like 2011, a single month’s rebound was never proof of a turn.

What members can do

The thin original carried one message: don’t mistake a monthly bounce for a yearly rescue. The ten-month ledger was clear — equities down 10%, bonds up 4%; the diversified were hurt least. Rather than bet on whether the year ends red, check whether your own portfolio has bonds as a line of defence. The MPF education hub explains balancing risk.