MPF Conservative Fund
Each MPF scheme is required by law to provide at a minimum an MPF Conservative Fund. An MPF Conservative Fund is essentially a Money Market Fund which invests exclusively in Hong Kong-dollar assets either in short-term bank deposits or short-term bonds.
By its nature, an MPF Conservative Fund is a low-risk investment product. It should be noted, however, that on some occasions (historically in times of high inflation), the returns on an MPF Conservative Fund might not be able to beat inflation and may even be negative.
Fees and Charges:
- Administrative expenses can only be deducted from an MPF Conservative Fund when the returns of the fund for the month exceed the monthly Prescribed Savings Rate (“PSR”) published by MPFA.
- If the return of an MPF Conservative Fund exceeds the PSR in any one of the following 12 months, trustees can recoup uncollected administrative expenses to the extent of the excess return.
- Fees and charges can be deducted from the assets of the fund (“Fund Level Deduction”) or members' account by way of unit deduction (“Member Level Deduction”).
- If the fund adopts the Fund Level Deduction method, the unit price/net asset value/fund performance quoted in the fund documentation have incorporated the impact of fees and charges.
- However, if the fund adopts the Member Level Deduction method, the unit price/net asset value/fund performance quoted (except for the fund performance figures quoted in a fund fact sheet) do not reflect the impact of fees and charges.
Money Market Fund
A Money Market Fund invests generally in short-term, high quality interest bearing securities, with the aim of earning an interest rate higher than that of savings deposits.
The risk of investing in a Money Market Fund is generally considered to be low as the fund is generally restricted to investment instruments of short maturity (on average, not over 90 days).
for an overview of the different types of MPF funds or learn more about the five major types of MPF funds with a visit to the MPF Investment Education Website