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- MPFA blog - Making additional contributions for better retirement protection while diversifying investment portfolio in the face of market volatility
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MPFA blog - Making additional contributions for better retirement protection while diversifying investment portfolio in the face of market volatility
MPFA Chairman Dr David Wong published his latest blog post today (3 November). He pointed out that in view of the recent gloomy social and economic environment in Hong Kong, many businesses have expressed their concern over the difficult business environment. In times like these, many employers agree that having the support of their employees is of the utmost importance, and that enhancing the retirement protection of their employees by making additional MPF contributions as a staff benefit will help instil a sense of belonging among them.
Dr Wong highlighted that a growing number of employers have made an extra effort to provide better retirement benefits for their employees. In 2018, 16,100 employers made MPF voluntary contributions for over 350,000 employees, with an aggregate amount of over $10 billion (13% growth compared with $8.9 billion in 2017).
In the face of the uncertainties in the market, Dr Wong encouraged employees to put more effort into risk management. In addition to regularly reviewing their MPF portfolio and making adjustment according to their personal needs, scheme members should consider factors such as different stages of their life, investment objectives, and risk tolerance level to formulate an appropriate investment strategy. Scheme members should diversify their retirement investment portfolio so as to avoid overly relying on funds invested in a single market or region, he added.
Scheme members who are unfamiliar with investing or have no time to manage their MPF should consider the Default Investment Strategy (DIS), which adopts a diversified approach by investing globally in different markets and asset classes. The “automatic de-risking” feature of the DIS reduces scheme members’ exposure to investment risk as they approach retirement age. Since its inception in 2017, the performance of DIS funds has been satisfactory. As at the end of September 2019, the Core Accumulation Fund and the Age 65 Plus Fund under the DIS had a return of 3.4% and 7.7%, respectively, in the past year, outperforming the corresponding mixed assets funds.
For the full version of this article, please visit the MPFA blog. The blog is in Chinese only.
－Ends－
3 November 2019
Dr Wong highlighted that a growing number of employers have made an extra effort to provide better retirement benefits for their employees. In 2018, 16,100 employers made MPF voluntary contributions for over 350,000 employees, with an aggregate amount of over $10 billion (13% growth compared with $8.9 billion in 2017).
In the face of the uncertainties in the market, Dr Wong encouraged employees to put more effort into risk management. In addition to regularly reviewing their MPF portfolio and making adjustment according to their personal needs, scheme members should consider factors such as different stages of their life, investment objectives, and risk tolerance level to formulate an appropriate investment strategy. Scheme members should diversify their retirement investment portfolio so as to avoid overly relying on funds invested in a single market or region, he added.
Scheme members who are unfamiliar with investing or have no time to manage their MPF should consider the Default Investment Strategy (DIS), which adopts a diversified approach by investing globally in different markets and asset classes. The “automatic de-risking” feature of the DIS reduces scheme members’ exposure to investment risk as they approach retirement age. Since its inception in 2017, the performance of DIS funds has been satisfactory. As at the end of September 2019, the Core Accumulation Fund and the Age 65 Plus Fund under the DIS had a return of 3.4% and 7.7%, respectively, in the past year, outperforming the corresponding mixed assets funds.
For the full version of this article, please visit the MPFA blog. The blog is in Chinese only.
－Ends－
3 November 2019
