MPF Investment

Principles of Fund Investment

Investing through MPF funds help solve problems that people may encounter when saving for retirement, such as limited investment knowledge and limited capital to invest.

Listed below are some major differences between investing on your own and investing through MPF:

Investing on your own
Investment through MPF
Limited investment knowledge

There are many ways to save, e.g. depositing money in banks, investing in bonds, mutual funds, shares, commodities (such as gold) and properties. However, all these tools have their own associated risks which may discourage the general public from investing.
Managed by professionals

With MPF funds, investments are under constant care of a team of professional fund managers. Most people might not be able to afford to hire a fund manager to take care of their investments if they invest on their own.
Limited capital to diversify investments

Most people have limited capital, making it difficult for them to buy different types of investment products and build a diversified investment portfolio.

Putting too much capital into one type of investment may increase investment risks.
Pooled funds to diversify investments

MPF funds are required by law to meet minimum diversification standards. 

Assets in an MPF fund with better performance can balance out the losses from assets with poorer performance to reduce investment risks. 

MPF investment enhances cost-effectiveness

MPF funds pool small contributions from scheme members, which allow MPF funds to work with a much larger portfolio of assets than an individual could afford to buy on his/her own. As a result, scheme members can access a much wider choice of investment products and diversify their investment, thus reducing risk and improving cost-effectiveness.

For more information about the features of MPF funds, please refer to Fund Fact Sheet of individual funds under different schemes in the MPFA’s Repository of MPF Scheme Documents.