MPF Rose 7.15% in 2010, Beating the Hang Seng

Figures published in January 2011 showed the MPF system returned 7.15% for the full year 2010, outperforming the Hang Seng Index over the same period — and leaving bank deposit rates far behind.

Which fund types did best?

Equities led, bonds contributed too. The system’s 7.15% overall gain was driven by equity funds, while bond and money-market funds also posted positive returns. Against a choppy Hang Seng, MPF’s diversified whole beat the single-market index.

Why did it beat the market?

Diversification smoothed the ride. MPF funds invest across global markets and asset classes that offset each other, so the system outperformed in a year when the Hang Seng wobbled. Against near-zero deposit rates, 7.15% looked handsome.

How should members read it?

Don’t let one good year breed complacency. MPF is a long-haul investment; one year’s return says little about the long run. Members should review their fund mix regularly and match it to their risk appetite. Compare MPF funds’ fees and track records at MPF fund comparison.