MPF Investment

Fund Types And Features

Money Market Fund – Other than MPF Conservative Fund

What is a money market fund?

A money market fund generally invests in short-term, high quality interest bearing securities (e.g. short-term certificates of deposit, government papers or commercial papers) to earn a rate of return similar to short-term savings rate or stable income from interest or bond coupon rates.

Risk level

Even though the risk of a money market fund is generally considered to be low, it is not principal-protected and the return may not beat inflation and may even be negative. The major risks of a money market fund include fluctuations in interest rates (when interest rates rise, bond prices may drop and result in a drop in the fund price) and fluctuation in exchange rates (if the fund invests in bonds traded in a foreign currency, the depreciation of that foreign currency will cause a drop in the bond price, which will lead to a drop in the price of the fund).

 

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