Year of the Dragon: Hong Kong MPF members advised to diversify their investments as markets remain volatile, analysts say
- Markets will continue to experience volatility due to uncertainties in economic growth, interest rates and geopolitical events, analyst says
- The MPF gained 9.5 per cent in the last Year of the Dragon in 2012, but lost 4.7 per cent in the just-ended Year of the Rabbit
The 4.7 million members of the Mandatory Provident Fund, Hong Kong’s compulsory pension scheme, should diversify their investments to prevail during the Year of the Dragon, which could provide as many twists and turns as the mythical creature’s serpentine shape, according to analysts and pension experts.
“During the Year of the Dragon, we anticipate that markets will continue to experience volatility due to uncertainties in economic growth, interest rates and geopolitical events,” said Philip Tso, head of institutional business for Asia-Pacific at Allianz Global Investors.
Investors should stay diversified to ride out any undulations ahead, analysts said.
“We are positive towards US equities as a core holding in the MPF portfolio,” said Ada Kung, chief investment strategist at Sun Life Asset Management (HK). “The end of the US rate-hike cycle will benefit growth stocks.”
The Year of the Dragon, which began on February 10 this year, is the fifth in the Chinese lunar calendar’s zodiacal cycle of 12 animals: rat, ox, tiger, rabbit, dragon, snake, horse, goat, monkey, rooster, dog and pig.
