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Know Your Funds
Under the MPF System, employers choose MPF schemes while employees decide on their own investment portfolios. The first thing you should do before deciding on your investment portfolio is to define your investment goals based on personal considerations. Afterwards, you have to look at factors relating to the MPF funds themselves, such as:
- Understand the fund's investment objectives and instruments
- Every MPF fund has its own investment objectives and instruments, and only by understanding them would you be able to decide whether a particular fund is suitable for you, and whether its risk levels are acceptable.
- In general, investment instruments of MPF funds include mainly equities, bonds and short-term interest bearing money market instruments such as bank deposits, government bills and short-term certificates of deposits, etc.
- Assess investment risks
- Factors such as a fund's investment objectives and instruments, and the markets in which it is invested, will affect the fund's risk level.
- Know the fund's features
- These features include the fund's launch date, its net asset value, type and asset allocation.
- Take note of fees and charges
- Fees and charges will affect a fund's long-term return so you need to know what fees you are being charged, as well as how and how much they are charged.
Types of MPF Funds
Scheme members can choose from a variety of MPF funds based on their personal needs. Nevertheless, you should be aware that each fund has different investment strategies and risk levels, and you need to learn more about the features and components of each fund before deciding on your investment portfolio.
Currently there are five main types of MPF funds:
- Money Market Fund
- Guaranteed Fund
- Bond Fund
- Mixed Assets Fund
- Equity Fund
Click here for more information on the different types of funds available to MPF scheme members.
In addition, you can find the annualized returns of the different types of MPF funds from 1 April 2001 to 31 March 2006 here.
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