|Investment on your own||Investment through MPF|
|Limited investment knowledge|
Though there are many ways to save, from bank deposits, bonds and mutual funds to company shares, commodities (like gold, silver) and property, each has its own associated risks which may be intimidating to a layman.
|Managed by professionals|
With MPF funds, your investments are in the constant care of a team of professional fund managers – care you probably wouldn’t be able to afford on your own.
|Limited capital to invest, leading to under-diversified investments|
Most people have only a small amount to put aside each month – not enough to invest in a number of investment vehicles, let alone achieving a diversified investment portfolio.
However, as investment markets rise and fall, putting too much capital into one type of investment may put your savings at risk.
|Critical mass, improved diversification and cost-effectiveness|
MPF funds are required by law to meet minimum diversification standards. Better-performing assets in an MPF fund can balance out the losses from under-performing assets to reduce investment risks.
Pooling small contributions from thousands of individual scheme members like you allows MPF funds to work with a much larger portfolio of assets than an individual could afford to buy on their own. This gives all participants access to a much wider choice of investments, and the potential to diversify their portfolio and reduce investment risks. It also means the fund can be run more cost-efficiently.
Last Revision Date: 19/10/2012