JPMorgan’s MPF play: 1.73% average fees and an investor-education push

This article is a rewrite of a report from September 2012.

(Note: the original’s opening duplicated another report in this batch; this rewrite focuses on the unique material — fee structure, investor education, and the emerging-markets fund play.)

Beyond its four-pronged bid for switchers, JPMorgan talked up two battlegrounds: fees and education.

What did the 1.73% average MPF fee mean?

The firm said MPF schemes then charged an average of 1.73%, with investment management fees accounting for roughly a third to a half and administration making up the rest. As assets grew, there would be room to cut.

The figure remains a useful benchmark today: one of the scheme’s policy goals was precisely to push that average down through competition.

Why did JPMorgan bet on investor education?

The firm argued MPF services needed more diversified fund choices — it then offered 10 sub-funds open to different trustees. It also leaned into investor education, hoping its online “fund studio” and investment academy would deepen members’ understanding of MPF.

Why was the emerging-markets fund an early-mover play?

JPMorgan spotted the MPF market’s potential early. Its exclusive JF Pacific Securities Global Emerging Markets Fund dated back to 2007, when the firm saw accumulating MPF assets needing diversification and applied for the first product targeting non-mature markets. But Lehman’s collapse the following year froze approvals for emerging-market MPF products, stalling the outward push.

The fund finally launched in September 2009 with HK$818 million in assets — still a rarity among the 500-plus funds on the market.