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3 mins readKnow More About MPF Constituent Funds – Equity Fund
The number of funds in the MPF market is increasing, providing employees with more options when planning for their retirement protection. To select the most suitable MPF fund for yourself, it is essential to understand the characteristics and risks of each type of fund.
According to data from the MPFA as of February 28, 2025, there are currently 380 approved MPF constituent funds available in the market. Among them, equity fund account for 143 (38%), making them the second-largest category of constituent funds, second only to mixed-asset fund.
Impressive Annualized Net Return Performance
Equity fund primarily invest in stocks listed on stock exchanges approved by the MPFA. Their objective is to achieve long-term capital appreciation through stocks and returns higher than the inflation rate. According to data from the MPFA as of the end of December 2024, since the implementation of the MPF system on December 1, 2000, the average annualized net return of equity funds has been 4.3%*. This not only surpasses the inflation rate of 1.8%* during the same period but also ranks as the highest among all fund categories.
*Source: Mandatory Provident Fund Schemes Statistical Digest (Quarterly Report) published by the MPFA in December 2024
One must recognize that while equity fund generally offers more favorable returns, their risks are typically higher than other types of funds. The return rate can be affected by various factors, such as market volatility, individual stock performance, and exchange rate fluctuations etc.
Suitable For Young People Or Those Able To Withstand Higher Risks
Due to the higher risks of equity fund, it may not be suitable for everyone. It is more appropriate for young individuals with a longer investment horizon and higher risk tolerance, as well as investors willing to take risks. Before investing in equity fund, employees should consider the fund's returns and assess their own risk tolerance to achieve ideal retirement savings.
Disclaimer: The information, data, and documents provided on this website are for general reference purposes only and should be used as self-help tools. Investment involves risks, and unit prices may fluctuate. Past performance figures shown are not indicative of future performance. BestServe Financial Limited and its content providers are not responsible for any loss or damage caused by reliance on any information or advice made in this website.
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