However, Mandatory Provident Fund providers advise employees to be prepared for a volatile stock market in the second half after a four- month rally.

"The growth was mainly contributed by the market rally when the equity markets in China and Hong Kong were boosted 30 percent to 40 percent," said Dick Lee Yui-leung, head of retirement and investment fund services at BOCI-Prudential Asset Management.

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The local benchmark soared 35.4 percent in the past three months while the mainland market gained 24.7 percent.

Hong Kong equity funds performed the best, gaining 32.88 percent in the three months ended last Friday, while Greater China equity funds leaped 28.38 percent, according to data from Lipper.

The last positive quarter in general was the last quarter of 2007.

"Another 30 percent increase is unlikely to occur in coming months, though we don't see much downside risk as market liquidity is tipped to stay in the market," Lee said.

While some analysts estimate the financial market may have bottomed out in the first quarter, corrections are possible as there was overbuying in past months.

"A positive return in the MPF market is expected this year but employees may lose money in some months in the second half due to market fluctuation," he said.

Bank Consortium Trust managing director Lau Ka-shi said that as many fund managers may doubt that the recent stock rally is a sustainable one and as BCT saw no quick fix for the global recession, the company was "cautiously optimistic" about the MPF market in the second half.

She said a jumpy financial market is expected in the coming six months whereas the Asian equity markets will be supported by the mainland.

Meanwhile, Manulife (0945) announced it will reduce the annual management fee for its MPF service by 0.35 percentage points to 0.5 percentage points of the net asset value, effective from November 1.

After the revision, the fee for Manulife's MPF services will be 1.25 percent to 2.2 percent of net asset value per annum.

Lau said BCT's management fee, at 1.4 percent to 1.5 percent of net asset value per annum on average, is lower than some of its peers, which charge from 1.75 percent to 2.25 percent.

Hongkong and Shanghai Banking Corp, which charges an annual fee of 1.25 percent to 1.95 percent of net asset value, said it has no plan to adjust fees for the time being while it would regularly review the fee structure.