MPF Third-Quarter Returns Rise 4.66% — Nine Months Up 8.06%, Trailing the Hang Seng

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

Lipper’s MPF fund performance survey for the third quarter of 2012: with European and US central banks easing together, global equities rebounded — September’s average MPF return was 3.09%, the quarter’s 4.66%, and the first nine months’ 8.06%, trailing the Hang Seng’s 10.4% over the same stretch.

Which funds benefited most?

Equities: up 4.73% in September, 11.19% over nine months. Mixed-asset funds rose 2.9% in September and 8.38% over nine months. Among equity funds, Asia-Pacific ex-Japan led the nine months at 14.38% (5.64% in September); Hong Kong and China equities gained 6.73% and 6.38% in September, with Hong Kong funds up 12.55% over nine months and China funds just 4.01%.

How much did workers make?

About HK$11,152 each over nine months. Excluding 2012’s new contributions, and using the HK$356.035 billion in total net MPF assets at end-2011 across 2.573 million employees and self-employed, the average gain was about HK$11,152 per person.

What threatened the fourth quarter?

Spain, the US election, the fiscal cliff. Lipper’s Hong Kong research head flagged Spain’s debt, the US presidential election and America’s “fiscal cliff” as equity risks — the fiscal cliff the biggest.

What is the lesson from 2012?

Easing-driven gains are not the norm. The third quarter of 2012’s 4.66% was built on coordinated central-bank easing. For members, the enduring rule: in volatile markets, long-horizon allocation and low fees are what protect returns.