Inflation bites: JPMorgan says retirement money must “beat inflation”, urges relaxed approval for emerging-market funds

JPMorgan, the third-largest MPF player by market share, says retirement savings need an “inflation-beating” strategy as inflation runs hot. One of its emerging-market funds took two years to win approval, prompting the firm to urge the MPFA to relax vetting of such products.

Why should emerging-market funds get easier approval?

Many emerging markets, including Asia, are posting 7% to 8% economic growth, underpinning their stock markets and helping retirement money outpace inflation. Desiree Chiu, JPMorgan Asset Management’s head of institutional and retirement business, said emerging-market growth far outstrips developed nations — key to beating inflation.

Could MPF fees be fairer?

JPMorgan backs tiered fee rates instead of flat fees: the larger the accumulated balance, the lower the rate — fairer to members. Following Bank of China-Prudential’s call for flexible fees, JPMorgan also supports lowering rates as MPF balances grow.

Are index funds always the better deal?

Chiu questioned whether low cost truly means better value, noting up to 99% of index funds underperform actively managed products. While the MPFA promotes low-fee passive products such as ETFs, he argued fees alone don’t tell the story. Ada Tan of JPMorgan Asset Management favours equities over bonds and has added H-share exposure, liking domestic consumption and cement stocks. When choosing funds, compare MPF fund fees and performance and consult MPF investment education.