MPF review: October rebound turns China equity from loser to winner, up nearly 16%

In mid-to-late October 2011, eurozone agreement on Greek debt haircuts sparked a market rebound, and MPF steadied before month-end. Lipper data showed MPF gaining 6.64% for the month on equity funds’ 10%+ bounce — with September’s biggest loser, China equity, becoming October’s champion.

How did the loser become the winner?

China equity funds rebounded 15.8% in October, followed by Greater China equity at 12.91%; mixed-asset funds returned 6.19%, beating bond and guaranteed funds’ roughly 1%. But the year remained ugly: January–October MPF averaged -5%, equity funds fell 10%, Greater China and Korea funds dropped 15%–16%, and Hong Kong and China equity lost 14%; bonds, money-market and guaranteed funds stayed positive.

The expert view: 蕭美鳳’s “better to sit still”

蕭美鳳, managing director of Convoy’s fund arm, told a fund channel that China and Greater China funds’ strength came partly from September’s low base and partly from genuinely strong late-month gains. On whether to switch, she stressed the market was murky and volatile — MPF investing was no place for day-trading instincts. Her example: with equity funds down year to date, switching crystallises paper losses into real ones; high-risk-tolerance workers need not rush to change, though they should watch mainland policy tightening’s impact; low-risk workers should take comfort in bonds’ steadiness rather than panic at the bottom rankings.

ECA coming: more fund variety ahead

Notably, Lipper’s survey added “Asia-Pacific bonds” and “other equities” categories. 蕭美鳳 said the coming ECA would diversify constituent-fund choices, with Asia-Pacific emerging-market bonds — a recent market focus — holding real appeal for employees.

What members can do

One month’s champion can be last month’s wooden spoon — the finest argument against trading MPF short term. Rather than chase monthly winners, set your allocation by risk tolerance and let time work. The MPF education hub explains each fund type’s character.