What Was iBond, and Was It Better Than the MPF Injection?

What Was iBond, and Was It Better Than the MPF Injection?

In 2011 the government planned its first retail bond — iBond, HK$5-10 billion, coupon linked to inflation, government-guaranteed, paying semi-annually at HK$10,000 a lot. Individuals only, no institutions; HSBC and Bank of China as joint arrangers; launch aimed for summer 2011.

Why did some say iBond beat the MPF injection?

FTU’s Ip Wai-ming argued one lot per citizen would help people more directly than HK$6,000 locked in MPF. Colleague Poon Pui-chu countered that iBond only helped those with spare cash. Academic Y.C. Richard Wong said the bond needed inflation plus 2-3% to be attractive.

What were iBond’s risks?

The government was relaxed: proceeds went to the Exchange Fund earning ~6%, covering coupons; only inflation above 6% would need treasury top-ups. Purchase caps would stop bulk buying.

What inflation hedges sit inside MPF?

Bond funds are one option. Compare MPF funds to see how MPF bond funds performed.