Star MPF Funds: High Returns Come With High Volatility

When MPF launched, fund choices were few and a batch of “star funds” broke out on Chinese equities — still shining today. But when picking one, don’t just compare returns in good times; weigh how it holds up in downturns and the trustee’s service too.

Which star fund leads?

The Haitong Hong Kong Special Administrative Region Fund averaged 15.37% a year over ten years — top of the charts. The “Haitong Hong Kong SAR Fund” (formerly Tai Fook Hong Kong SAR Fund) and Manulife’s “MPF China Value Fund” averaged 19.48% and 14.31% a year respectively over five years. Manulife’s top three holdings: Brilliance China (1114), CNOOC (0883) and CCB (0939).

Why the roller-coaster ride?

Because Haitong plunged 53.52% in 2008, worse than its Greater China equity peers. Morningstar Asia senior analyst Ming Wai-hung warns its short-to-medium-term record dazzles, but it lags in deep sell-offs. Also, don’t confuse “cumulative” returns (often multiples) with “annual” figures (double digits) when comparing.

Why does trustee service matter?

Because it affects fees and the service you actually get. The solid-performing “First State MPF Hong Kong Equity Fund”, for instance, uses Sun Life Trustee (formerly CMG Asia Trustee) as its intermediary — a smaller local player that has switched trustees before, with a more complex internal structure. Compare MPF funds’ fees and track records at MPF fund comparison.