Too Late to Switch: Why One Manager Stayed in MPF Equity Funds Through the 2011 Turmoil

In late November 2011, with the European debt crisis still hanging over markets, many workers watching their MPF balances were asking the same question: should I switch to something more conservative? AMTD wealth planning executive 鄧聲興 gave a flat no — not because he wasn’t worried, but because, in his words, switching now was “too late”.

Should you switch to conservative funds when markets tumble?

In 2011 鄧聲興 said his MPF had returned about 22% cumulatively over eleven years, concentrated in Greater China and Hong Kong-China funds, and he had no plans to switch no matter how rough markets got: the European and US debt crises had already been running for a while, so rotating into conservative funds at that point was too late. With twenty to thirty years to retirement, his long contribution runway could absorb short-term volatility, while regular fixed contributions let dollar-cost averaging smooth his entry costs and lower risk.

Why “too late”?

His logic was blunt: MPF is long-term money, not a trading account. With debt fears long entrenched, the worst falls tend to come at peak panic — switching from aggressive to conservative at that moment locks in losses, the classic buy-high-sell-low trap. He was instead optimistic about mainland China’s growth over the next twenty years, arguing that global turmoil was pushing capital’s focus toward China — reason enough to hold his ground.

Dollar-cost averaging: the case for contributing through the fall

Tang reviewed his MPF returns every quarter, but reviewing didn’t mean acting. His conviction came from dollar-cost averaging: with regular fixed contributions, the same amount buys more fund units when markets fall, naturally diluting average cost — and the longer the runway, the more a higher-risk mix can be justified in pursuit of better long-term returns.

Phillip senior vice-president 何猷靖 (48% over eleven years) took a different tack — reviewing every three months, adding Hong Kong equity funds in tranches when the Hang Seng crashed to 16,000, shifting to capital-preservation funds as markets rose, with 65% parked long-term in conservative funds. But both agreed on one thing: invest in markets you understand, and don’t switch blindly with the herd.

Dollar-cost averaging and asset allocation are explained at the MPF education hub.