Target-date funds: the 2012 ancestor of Hong Kong’s “lazy” MPF investing

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

Era analysis: The original was a brief item introducing target-date funds: these MPF portfolios held equities, bonds and other fund types, with managers adjusting allocations as markets moved. Managers used a “glide path” approach, gradually reducing higher-risk assets while cushioning the portfolio against short-term market swings.

Once employees picked the target-date fund closest to their expected retirement year, asset allocation was handed to the fund manager, who adjusted it as they aged. Dubbed “lazy funds“, they suited members with limited investment knowledge or no time to manage MPF.

Seen today, the item matters because: it captured an early form of “lazy investing” in MPF before the Default Investment Strategy arrived in 2017. Today’s Core Accumulation Fund and Age 65 Plus Fund run on the same age-based automatic de-risking glide-path logic — the 2012 target-date fund was, in effect, the concept’s ancestor.