Overview of MPF funds

Fund Type Fund Name Investment Objective Investment Instruments Risk Level Major Risks Fees & Charges Features / Points to Note Potential Suitability
Money Market Fund and Others MPF Conservative Fund To earn a rate of return similar to the Hong Kong Dollar savings rate Short-term bank deposits and short-term bonds Relatively low Fluctuation in interest rates No administrative fees can be charged by trustees if the rate of return in a particular month is lower than or equal to MPFA’s Prescribed Savings Rate for that month.
 
  • The law requires that each MPF scheme offers at a minimum an MPF Conservative Fund.
  • MPF Conservative Funds are low-risk funds, but their return may not beat inflation and may even be negative.
  • MPF Conservative Funds are a type of Money Market Fund and are generally described as a Money Market Fund in the Fund Fact Sheet issued by trustees.
Conservative, risk averse scheme members, especially those close to retirement
  Money Market Fund

(Or Cash Fund)
To earn a rate of return comparatively higher than that of bank deposits or short-term certificates of deposit Short-term interest bearing money market instruments such as short-term bank deposits, government bills or commercial papers Relatively low Fluctuations in interest rates and exchange rates In general, it is charged as a percentage of the fund's net asset value.
  • The nature of a Money Market Fund is relatively stable. This type of fund can be used to manage cash that is not currently invested, while earning income generated through interest.

People who are close to retirement, or low-risk bearers

Guaranteed Fund Guaranteed Fund To provide a guarantee on the capital invested, or to achieve a guaranteed rate of return Bonds, stocks or short-term, interest- bearing, money market instruments Relatively low (but also depends on the guarantee conditions) The guaranteed rate of return may be modified with prior notice; credit risk of related insurance company (if holding an insurance policy); guarantor risk The guarantor usually charges a guarantee fee or reserve fee, in addition to the basic fees and charges typical of other MPF funds.
  • There are two major types of guarantee:  capital guarantee or return guarantee.
  • To qualify for the guarantee, all guarantee conditions such as minimum investment period and withdrawal requirements must be met. (Scheme members must read the terms and conditions of individual funds carefully.)
Risk averse scheme members, especially those close to retirement who are willing to abide by the guarantee conditions
Bond Fund Bond Fund

(Or Fixed Income Fund)
To earn a stable income from interest and the bond coupon rate, and make profits from bond trading Bonds Low to medium Fluctuation in interest rates, exchange rates and bond credit ratings The fee is generally a percentage of the fund’s net asset value.
  • The bonds must meet the minimum credit rating or listing requirements prescribed by MPFA.
Moderately conservative scheme members with a low risk appetite, and those seeking a stable return over the medium-to-long term
Mixed Assets Fund Mixed Assets Fund

(Or Stable Fund, Balanced Fund, Life-Cycle Fund, Growth Fund)
To achieve capital appreciation over the long term through investing in a combination of stocks and bonds Stocks and bonds Medium to high Stock market volatility, interest rate fluctuation, exchange rate fluctuation, and bond credit ratings The fee is generally a percentage of the fund’s net asset value.
  • Different Mixed Assets Funds have different proportions of stocks and bonds. In general, a greater proportion of stocks is associated with higher risk.
Scheme members may adjust the proportion of stocks to bonds in their portfolios at different life stages
Equity Fund Equity Fund To achieve capital appreciation and a return higher than inflation over the long term Stocks Relatively high Stock market volatility, exchange rate fluctuation and the overall condition of listed companies The fee is generally a percentage of the fund’s net asset value.
  • There are usually three types of Equity Funds: single market, regional market or global market.
  • They invest mainly in stocks listed on stock exchanges approved by MPFA
Young scheme members with a longer investment horizon and a higher risk tolerance level, and other risk tolerant scheme members
Others Index Fund To earn a rate of return similar to that of the market index that the fund replicates For example: stocks

(the fund's investment portfolio follows the weightings of the constituent stocks of the market index that it replicates)
Medium to high Volatility of the stock market that the fund replicates As the constituent stocks of the relevant index are bought and sold within the fund in accordance with their respective weightings in the index, this would result in less frequent trading which translates to lower fees & charges than other funds
 
  • The investment of the fund is limited to the constituent stocks of the market index that it replicates, so the fund performance is largely in line with the underlying market index.