AIA launches four low-fee funds, cuts three existing funds to 0.99%

AIA today unveiled a customer value proposition: from September 23 it will launch four low-fee constituent funds and cut management fees on three existing funds, a bold move in the ongoing MPF fund fees comparison battle. The four new funds — Asian Bond, American, Eurasian and China-Hong Kong funds — carry management fees of at most 0.99%; fees on the existing World Bond, MPF Conservative and Global Equity Strategy funds fall from 1.25% to 0.99%.

How low are the new fees?

Their fund expense ratios are the market’s lowest in the mixed-asset, equity and bond categories — 0.19%, 0.13% and 0.21% respectively — covering about 80% of MPF market net assets. AIA (Trustee) chief executive Bonnie Tse said only these three existing funds have room for cuts for now; further reductions will be studied.

How big is the platform?

With the four additions, AIA’s platform covers 25 constituent funds run by five managers, including JPMorgan, Fidelity and Amundi. AIA has about 700,000 MPF clients and roughly 10% market share.

The “AIA-JF MPF Prime Plan” will also be renamed the “AIA MPF Prime Plan” to highlight its multi-manager strategy.

Compare fund fees at MPF fund comparison.