Low fee performance surprise

21st July 2021

MPF commentator releases 1st half performance scorecard

MPF Ratings’ June MPF Scheme Net Returns Summary is now available.

Key points are as follows:

  • June’s MPF assets grew 0.4% to an end-of-month record $1.221 trillion (See Table 1), an increase of $5.169 billion over 1-month. The quarterly and year-to-date (YTD) growth of MPF assets were 4.5% and 7.2% respectively.
  • Average MPF account balance for MPF’s 4.54m members grew $1,138 in June to an end-of-month all-time record high of $268,866. Quarterly and YTD average balances were up by $11,484 and $13,390 respectively.
  • Despite a 1 month median loss of -0.02% in June, the MPF industry is reporting median gains of 3.3% and 4.8% in the June quarter and YTD respectively (Also see Table 1).
  • Low fee MPF scheme, My Choice Mandatory Provident Fund Scheme, with a total Fund Expense Ratio (FER) of 1.03% vs an MPF system FER median of 1.43% (See Table 2) generated the best YTD performance, a net return of 6.1% (Also see Table 2).
  • Positively for most MPF members the system’s 4 largest MPF schemes, covering 62.3% of the market, all produced year-to-date returns above the median (Also see Table 1).

On how My Choice Mandatory Provident Fund Scheme is beating its MPF competitors

In releasing MPF schemes’ net return performance numbers for June MPF Ratings’ Chairman, Mr Francis Chung (叢川普) observed the following, “With MPF member average account balances at an all time high awareness of MPF performance amongst members is also higher than ever and while it’s good news that all MPF schemes have produced positive performance so far this year, one scheme, My Choice Mandatory Provident Fund Scheme, has been a clear stand out from the competition.  A combination of very low relative fees and good use of 3rd party fund managers to manage member assets has seen My Choice produce a year-to-date return greater than 6%.”

Largest MPF schemes have also performed well

“While My Choice has been a standout performer this year, additional good news is that the 4 largest MPF schemes, sponsored by Manulife, HSBC, Sun Life and AIA have also produced better than median returns to date.  Given their combined market share covers the vast majority of MPF members, it means that most MPF members have also benefitted from the strong first half of 2021.

Table 1: MPF Scheme Assets and Net Returns as at 30 June 2021

Source: MPF Ratings

Table 2: MPF Scheme Assets, Year-to-Date Net Returns and Fund Expense Ratios as at 30 June 2021

Source: MPF Ratings

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