With November’s MPF gains easing—the GUM MPF Index at 284.8 points, down just 0.02% for the month—many members are looking for safer havens, and GUM Chief Investment Officer Christopher will be examining fixed income fund options for conservative positioning!

Volatile Markets? How to Secure Profits and Go Defensive

For those seeking to limit exposure to swings, MPF fixed income funds are a solid choice. As of November, the GUM MPF Fixed Income Index rose 3.2%, led by Asian Bond Funds at 7% returns.

The US rate-cutting cycle has weakened the dollar, while recent equity volatility has boosted safe-haven demand, lifting non-USD and high-yield Asian bonds—helping this category outperform others.

For ultra-conservative MPF members, MPF Conservative Funds focus on short-term HKD bank deposits and bonds, offering minimal risk but lower returns that may lag inflation over time.

Top-Performing MPF Asian Bond Funds

Performance across MPF Asian Bond Funds remains tight, with gaps of no more than 0.7% through November.

The leaders:

1. Principal MPF Scheme Series 800 — Principal Asian Bond Fund (Class N): 7.6%
2. MASS Mandatory Provident Fund Scheme — Asian Bond Fund: 7.4%

December Rate Cut Ahead: Impact on MPF Fixed Income?

Markets assign a 90% probability to a 0.25% Fed cut in December, and comments from President Trump about a potential new Fed chair early next year suggest possibly faster easing.

We expect the rate-cutting cycle to support bond funds overall, though it will gradually pressure returns on MPF Conservative and money market funds long-term. But NO urgent moves are needed—actual pace will depend on incoming economic data.

Summary

Despite November’s equity fluctuations, MPF fixed income funds delivered steady returns for conservative MPF members. With rate cuts continuing into year-end, these options remain appealing for locking in gains or reducing risk.

Seeking balance between growth and safety, or a personalised MPF plan? Contact GUM’s MPF expert team—we’ll design a tailored strategy to keep your retirement savings growing steadily.