MPF Investment

The risk of mixed assets funds generally lies somewhere between the risk of a bond fund and an equity fund, depending on the relative weight of different assets in the investment portfolio. In general, a greater proportion in stocks is associated with a higher level of risk. 

Returns may be affected by factors such as: 

• the volatilities of stock markets and performance of individual stocks, 
• fluctuation in exchange rates (if the fund invests in stocks and bonds traded in a foreign currency, the depreciation of that foreign currency will result in a drop in the prices of the stocks and bonds, leading to a drop in the price of the fund), 
• fluctuations in interest rates (when interest rates rise, bond prices may drop and result in a drop in the fund price), and
• credit ratings of bonds (if the fund has invested in a bond whose credit rating is downgraded, the bond price will normally drop, which may lead to a drop in the price of the fund).

You should read the MPF Scheme Brochure carefully to understand the relevant risks.

A target date fund is a special form of mixed assets fund which links the investment portfolio to a target date. The asset mix in the fund changes as the target date approaches.

This kind of portfolio maximizes growth opportunities in equities in the earlier stage and gradually increases its allocation to more conservative assets (e.g. bonds and cash) closer to the target date.