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As at 30 June 2010, there are 39 MPF schemes in the market that provide an aggregate of 376 constituent funds. On average, scheme members can choose between about 9 types of funds within an MPF scheme.
The law requires all MPF schemes to offer at a minimum, an MPF conservative fund in each scheme. In order to meet the different risk tolerance levels of scheme members, all MPF schemes in the market provide other investment fund choices in addition to a conservative fund. The range of the funds on offer may go from low risk steady growth options, to higher risk (potentially) higher growth options.
The following types of funds are available in many MPF schemes:
Mixed Assets Fund
A mixed assets fund invests primarily in a mix of bonds and equities. Typically, it invests in both equities and bonds, either globally or regionally, spreading the investment risk and taking advantage of investment opportunities.
Mixed assets funds may carry different names and have different risk levels, depending on the allocation between equities and bonds. As you would expect, the risk level of this type of fund is usually somewhere in between that of a bond fund and an equity fund. As a rule of thumb, the higher the proportion invested in stock, the higher the risk. In any event, you should read the offering document or any other fund updates to fully understand the risks attached to a particular fund.
Click here for an overview of the different types of MPF funds.
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