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MPFA Chairman Dr David Wong published his latest blog post today (5 January). He mentioned that many investment experts took a dim view of the market last year, but it turned out that the global market was not as gloomy as expected in the end. On the whole, the returns were spectacular, confirming that no one has the crystal ball to predict the market. He urged MPF scheme members not to try to time the market, but to consider their personal circumstances, such as their contribution period, investment goals and risk tolerance level in deciding how to allocate their MPF assets.

Dr Wong said that in terms of risk management, the Default Investment Strategy (DIS) was an ideal option, especially for members who lack the knowledge or time to invest on their own. The DIS, comprised of two mixed assets funds, the Core Accumulation Fund and the Age 65 Plus Fund, adopts a diversified investment approach by investing in different asset classes in global markets. The strategy aims to strike a balance between short-term volatility and long-term investment returns, and automatically reduces investment risk as members age.

Dr Wong added that the most effective way to enhance retirement protection is by increasing MPF contributions. He suggested scheme members consider making Tax Deductible Voluntary Contributions (TVCs). As at the end of November 2019, the total number of TVC accounts approached 22,000, and the total amount of TVCs received was about $634 million. If scheme members make TVCs before 31 March 2020, they can save up to $10,200 in taxes in the 2019/20 assessment year.

For the full version of the article, please visit the MPFA blog. The blog is in Chinese only.

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5 January 2020