MPF loses 5.27% in August: worst since the tsunami — beware selling low, buying high

August 2011 brought treacherous global markets — a US downgrade and an unresolved European debt crisis — and workers’ MPF lost 5.27% on average in a month, its worst showing since the financial tsunami. That still beat the Hang Seng’s 8.5% fall, but experts warned volatility would persist.

Which funds fell hardest?

Equity funds, down 8.81% on average — worse than the Hang Seng. Korea equity led the fall at 15% for the month; China and Europe equities each fell over 10%. Over three months, Europe equity had crashed 16.35%. Hong Kong investors’ beloved mixed-asset funds fell 4.97%.

Which funds stood out?

Bond funds, up 0.97% in August — the only winning asset class. Hong Kong-dollar bonds (+1.54%) beat global bonds (+0.81%). Money-market funds were flat; guaranteed funds dipped 0.61%.

Tempted to chase bonds? Don’t!

Towers Watson director Philip Tso warned against jumping ship just because bonds looked good — selling low and buying high rarely works out. MPF is a long-term investment; short-term swings need not matter. Lipper’s Eric Wong added that recession fears could keep weighing on returns — patience was required.

Compare fund types’ performance through volatile markets with MPF fund search.