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Money Market Fund – MPF Conservative Fund
What is MPF conservative fund?
The law requires that all MPF schemes offer an MPF Conservative Fund. An MPF conservative fund is a type of money market fund. It invests exclusively in Hong Kong-dollar assets, either in short-term bank deposits or short-term bonds to earn a rate of return similar to the Hong Kong dollar savings rate.
Risk level
Even though an MPF conservative fund is considered a low-risk investment product, it is not principal-protected and the return may not beat inflation and may even be negative. The major risk of an MPF conservative fund is fluctuations in interest rates (when interest rates rise, bond prices may drop and result in a drop in the fund price).
You should read the MPF Scheme Brochure carefully to understand the relevant risks.
Subject to fee control
- Administrative expenses can only be charged when the returns of an MPF conservative fund for a given month exceed the monthly prescribed savings rate (PSR) published by the MPFA.
- If the returns of an MPF conservative fund exceed the PSR in any one of the following 12 months, trustees can recoup uncollected administrative expenses to the extent of the excess returns.
