MPF performance ranking: the 11-year scorecard of 2011

On 21 December 2011, a consultancy put out a three-sentence wire item: MPF’s eleven-year cumulative average return was 20.47%, with equity funds leading at 30%. This telegram-style snippet landed in one of MPF’s most bruising years — and its real message lay in the comparison behind the numbers.

How was the 20.47% MPF return built up?

As of 30 November 2011, MPF’s eleven-year cumulative average return stood at 20.47%, down sharply from 33.91% at end-2010. The near-14-point evaporation was the price of 2011’s global equity rout, which hammered stock funds and shrank the long-term scorecard. By category, equity funds still led over eleven years at 30%, ahead of mixed-asset funds’ 24.89% and money market funds’ 0.94%.

Why the numbers mattered then

2011 was on track to be MPF’s second-worst year on record, after 2008. On the eve of the Employee Choice Arrangement — and amid a trustee fee war — the industry needed a “long-term it still pays” narrative: 20.47% over eleven years, or under 2% a year, was thin but at least proved MPF was not money poured down a drain.

What followed

The full 2011 year ended with an MPF loss of about 8.4% (Lipper data, published January 2012), costing the average member over HK$10,000 and confirming its second-worst ranking. The Employee Choice Arrangement this snippet heralded launched on schedule on 1 November 2012. In hindsight, the 20.47% figure’s lasting lesson was simple: MPF’s long-term return lives or dies on equity funds — a truth that still holds. See the MPF education guides for each fund type’s long-term profile.