Hong Kong mandatory provident funds gained an average of 0.45% in June. Bond MPFs posted an average gain of 0.87%, outperformed all other types of MPFs. Equity MPFs came in second with an average gain of 0.54%, while mixed-asset MPFs gained an average of 0.44%.

Launched in 2000, the MPF is Hong Kong's first and so far only compulsory retirement programme, where both workers and employers contribute monthly up to 5% (or HK$1,000, whichever is lower) of the employee's salary to the fund. The low-risk options available for most retirement plans, including those offered for the MPF, have mainly involved between 20% to 30% exposure in equities. The majority of these funds are held in global fixed-income securities, a strategy that in previous years proved successful in delivering stable medium-term returns, but not without experiencing periods of sustained negative performance such as during the global financial crisis.

"As anticipated, global equity markets did stage a pullback from mid-June to early-July," says Eric Wong, head of research at Lipper. "As their valuation was not expensive, the pullback was not substantial."

Average return of MPFs in June, according to Lipper:

  • Bond Global +1.00%
  • Bond HKD +0.46%
  • Bond +0.87%
  • Equity Asia Pacific +3.34%
  • Equity Asia Pacific Ex-Japan +0.53%
  • Equity China +3.45%
  • Equity Europe -2.01%
  • Equity Global -0.16%
  • Equity Greater China +0.12%
  • Equity Hong Kong +1.87
  • Equity Japan +1.92%
  • Equity Korea -1.29%
  • Equity North America +0.2%
  • Equity Sector Pharma&Health +1.29%
  • Equity +0.54%
  • Mixed Asset HKD Aggressive +0.44%
  • Mixed Asset HKD Balanced +0.55%
  • Mixed Asset HKD Conservative +0.62%
  • Mixed Asset Other Flexible +0.73%
  • Target Maturity -0.58%
  • Mixed Assets +0.44%
  • Money Market HKD -0.01%
  • Money Market USD +0.52%
  • Money Market +0.01%
  • Guaranteed +0.33%