September MPF Returns Hit 3.09%, Best in Six Months — HK$4,620 per Worker

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

Global easing lifted MPF fund performance in September 2012: equity funds gained 4.73% in the month, pushing overall MPF returns to 3.09% — the biggest monthly gain in half a year, or HK$4,620 per worker. For the first nine months, MPF returned 8.06%, putting about HK$12,000 into each worker’s pocket.

Which funds led?

Equities, up 4.73% in September. Lipper Hong Kong data showed Hong Kong and mainland equities best at 6.73% and 6.38%; Asia-Pacific and Greater China equities rose 6.16% and 5.97%. Over nine months, equity funds gained 11.19%, led by healthcare equities at 18.81%, Asia-Pacific ex-Japan at 14.38% and Hong Kong equities at 12.55%; mixed-asset funds rose 8.38% and bonds 4.14%.

How did MPF compare?

It trailed the Hang Seng and the Tracker Fund. The Hang Seng gained 10.4% over the first three quarters and the Tracker Fund of Hong Kong (2800) rose 13% — from HK$19.02 at the start of the year to HK$21.50 at end-September, 500 units per lot.

Why was September so strong?

A one-off QE3 bounce. The US Federal Reserve’s third round of quantitative easing steadied global markets, with Asian equities the standout. But advisers warned the gains were a one-off sentiment bounce on easing hopes, with economic fundamentals still clouded — the rest of the year hinged on the euro-zone debt crisis, US economic remedies and the US election.

What is the lesson from 2012?

One hot month is not a track record. September 2012’s 3.09% was the half-year’s best, yet still trailed the Hang Seng. For members, the enduring rule: judge MPF on the long run, the fees, and like-for-like comparison — not a single month’s number.