As at 30 June 2010, there are 39 MPF schemes in the market that provide an aggregate of 376 constituent funds. On average, scheme members can choose between about 9 types of funds within an MPF scheme.

The law requires all MPF schemes to offer at a minimum, an MPF conservative fund in each scheme. In order to meet the different risk tolerance levels of scheme members, all MPF schemes in the market provide other investment fund choices in addition to a conservative fund. The range of the funds on offer may go from low risk steady growth options, to higher risk (potentially) higher growth options.

The following types of funds are available in many MPF schemes:

Money Market Fund	Guaranteed Fund	Bond Fund
Mixed Assets Fund	Equity Fund	Others

Money Market Fund

• MPF Conservative Fund
  Each MPF scheme is required by law to provide an MPF Conservative Fund.  A conservative fund is essentially a money market fund which invests exclusively in Hong Kong-dollar assets either in short-term bank deposits or high quality debt securities. Administrative expenses can only be deducted from a conservative fund when the returns of the fund for the month exceed the monthly savings rate prescribed by the MPFA.   However, if the return of a conservative fund exceeds the MPFA’s PSR in any one of the following 12 months, trustees can collect the uncollected administrative expenses. 

Fees and charges can be deducted from the assets of the fund or members' account by way of unit deduction.  If the fund uses asset deduction mechanism, unit price/net asset value/fund performance quoted in the fund documentation have incorporated the impact of fees and charges.  On the other hand, if the fund uses unit deduction mechanism, unit price/net asset value/fund performance quoted (except for the fund performance figures quoted in a fund fact sheet) do not reflect the impact of fees and charges.

By the nature of its investment, a conservative fund is a conservative and low-risk investment product. It should be noted, however, that on some occasions (historically in times of high inflation), the returns of conservative fund might not be able to beat inflation.

• Money Market Fund
  A money market fund invests generally in short-term high quality interest bearing securities, with the aim of earning an interest rate higher than that of savings deposits. The risk of investing in money market fund is generally considered to be low as the fund is generally restricted to investment instruments of short maturity (on average, not over 90 days for the fund).

  Click here for an overview of the different types of MPF funds.