MPF loses 7.13pc in a year: HK$10,307 gone per worker

This article is a rewrite of a report from July 2012.

The eurozone debt crisis and the US credit downgrade crushed global sentiment over the year to June 2012, and MPF was no exception: despite a positive first half (+3.2 per cent), the 12 months from July 2011 recorded a negative return above 7 per cent — workers lost over HK$10,000 each even by doing nothing.

Which segments lost most?

Based on MPF data to March 2012, the average account lost HK$10,307 — HK$859 a month. The Hang Seng Index fell 2,956 points (-13 per cent) over the same period, close to MPF equities’ loss; bonds cushioned the blow, leaving MPF ahead of the broader market overall.

June lagged the market; bonds steady but meagre

The Hang Seng rose 812 points (+4.3 per cent) in June alone, but MPF managed only 2.37 per cent; June equity returns of 3.59 per cent also trailed, though North American and global equities (3.4 per cent and 4.1 per cent) beat the market while China, Greater China and Hong Kong lagged. Bonds stayed “steady” in positive territory but the gains were tiny — 0.55, 1.66 and 1.14 per cent for the month, half-year and year respectively, all under 2 per cent — though over three years their 13.63 per cent was not far off equities’ 18.69 per cent.

Lipper’s Hong Kong research head credited stabilising European debt and mainland China’s first rate cut since 2008 for June’s return to positive territory, but flagged lingering uncertainty and advised allocating by risk tolerance. This loss-focused angle contrasts with contemporaneous first-half gain stories: change the window, and the story flips.