Worst MPF Fund Wiped Out 3.5 Years of Contributions — BEA Japan Equities Lost 14% a Year

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

Losing money in MPF is no news — but an MPF comparison shows how bad “outrageous” gets. The Consumer Council’s 2012 report revealed the worst MPF fund’s one-year annualised return was -14.04%: for a worker earning HK$15,000 and contributing HK$1,500 a month, a year’s contributions vanished — 3.5 years of saving for nothing.

Which fund was worst?

BEA’s Japan equity fund — down 14.04% a year. The worst performer was BEA’s Japanese equities fund at -14.04% annualised. The Council’s arithmetic: HK$15,000 salary, HK$1,500 monthly contributions — HK$18,000 a year gone, equal to 3.5 years of contributions wasted.

And the best?

Manulife’s international bond fund — up 5.8%. The best was Manulife Global Select’s international bond fund at +5.8% over the year. Best versus worst differed by nearly 20 percentage points — one system, two fates.

What did the Council say?

Fees and returns are decoupled — expensive doesn’t mean good. Chief executive Connie Lau noted fund expense ratios ranged from 4.62% to 0.17%, yet high fees didn’t mean good performance. Don’t assume pricey means better.

What is the lesson from 2012?

Three and a half wasted years is the priciest lesson. The 2012 calculation made risk concrete for workers: picking wrong doesn’t just lose money, it loses time. MPF losses can feel abstract — “3.5 years for nothing” is painfully concrete, and a reminder to compare.