MPF back on track in third quarter thanks to QE3
Retirement funds record an average 4.6pc return, bouncing back after loss, but they still fare worse than the Hang Sang Index
The city's Mandatory Provident Fund (MPF) turned the corner in the third quarter, helped by monetary easing in the United States last month that boosted stock markets worldwide.
The 443 retirement funds, which cover 2.5 million employees in Hong Kong, recorded an average 4.66 per cent return in July-September, recovering from a loss of 3.64 per cent in the second quarter, according to data provider Lipper, a Thomson Reuters company. Third-quarter MPF average returns, however, fared worse than the Hang Seng Index, which gained 7.2 per cent.
In the first nine months of this year, MPFs gained 8.06 per cent. Mixed-asset funds, a blend of stocks and bonds that represent 42 per cent of MPF assets, gained 4.75 per cent in the third quarter, recovering from a 3.43 per cent loss in the second quarter.
Equity funds, the second-most popular MPF vehicle that accounts for 35 per cent of all fund assets, reported a 6.52 per cent return in the third quarter after a loss of 5.92 per cent in the previous quarter.
Bond funds returned 2.44 per cent in the quarter, while money market funds on average returned 0.08 per cent.
Almost all categories of funds ended in positive territory in the third quarter. The only losers were the Japan equity funds, which on average lost 1.24 per cent.
