What is Default Investment Strategy (DIS) ?

If you do not have the time or do not want to make an investment choice with your MPF contributions, or if you are concerned that the high management fee of the fund you choose or inflation might eat up your earnings, DIS (Default Investment Strategy) might well be the thing for you. DIS is a standardized investment arrangement required by law for all MPF schemes, and is made up of the Core Accumulation Fund (CAF) and the Age 65 Plus Fund (A65F). Starting on April 1, 2017, members who do not make an investment choice when they set up a new MPF account will have their money invested in DIS.

DIS is invested in various assets in different markets in the world. One of the characteristics is that the investment risk is lowered in proportion to age. In a process known as “Automatic De-risking”, the trustee invests the contributions of members who are under age 50 in CAF, which is more ambitious in its approach. When members reach the age of 50, the trustee will automatically adjust their portfolio every year, reducing their holding in the CAF and increasing their holding in the A65F. When they reach age 64, all their benefits will be held in the A65F.

Low management fee is another characteristic of DIS, which does not exceed 0.75% of the net annual asset of the fund, and the recurrent out-of-pocket expenses must not be over 0.2% of the net asset value of the funds per year, which is lower than the average expenses of similar funds.

DIS Performance Since Launch (2017-2026)

Since its launch on April 1, 2017, DIS has delivered impressive returns for scheme members:

• Core Accumulation Fund (CAF): Annualized return of approximately 6.4% (April 2017 – March 2026)
• Past 12 months (2024-2025): CAF returned approximately 11.5%, significantly outperforming many actively managed funds
• 2025 Performance: Strong year with positive returns across all DIS components

Why Choose DIS?

DIS offers several advantages for MPF members:

1. Automatic de-risking: Your investment automatically becomes more conservative as you approach retirement age, reducing exposure to market volatility
2. Low fees: With management fees capped at 0.75% p.a. and expenses at 0.2% p.a., DIS is one of the most cost-effective MPF options available
3. Professional management: DIS invests in globally diversified assets, managed by experienced fund managers
4. Strong track record: Since its launch in 2017, DIS has consistently delivered positive returns, with CAF achieving approximately 6.4% annualized return
5. No guessing required: Perfect for members who prefer a “set it and forget it” approach to MPF investment

DIS vs. Actively Managed Funds

In recent years, DIS has outperformed many actively managed MPF funds:

• CAF 1-year return: approximately 11.5% (2024-2025)
• Many actively managed equity funds struggle to beat the benchmark after fees
• DIS offers transparency and consistency without the risk of poor fund manager selection

Getting Started with DIS

If you are a new MPF member and do not wish to make an investment choice, your contributions will automatically be invested in DIS. Existing members can also switch to DIS through the eMPF platform or by submitting the relevant form to their MPF trustee.

For more information about DIS and the eMPF platform, visit the MPFA website.

[Source: The Mandatory Provident Fund Authority]