MPF fund fees comparison: expense ratios can differ by 4 percentage points

Semi-portability, originally due this April, was shelved to tighten intermediary regulation. The MPFA has consulted on the fix, including an electronic platform; if the bill passes in Q4, semi-portability could launch in H2 next year — the industry expects September next year at the earliest.

How wide are MPF fee gaps?

Across MPF’s six fund categories, annual fund expense ratios can differ by 2 to 4 percentage points. Will semi-portability trigger a trustee price war? Hong Kong Trustees’ Association vice-chairman Lau Kar-shi says each trustee has its own sales strategy — fee cuts or new fund launches; cheaper new products like ETFs will multiply next year.

Why was it shelved?

Towers Watson Hong Kong chief Cho Wai-bong says the halt was to stop overly aggressive intermediary sales tactics, hence the need for legislation. The regulatory bill is largely shaped; only enactment remains. Semi-portability benefits everyone and the bill is uncontroversial — expect a smooth H2 2012 launch after LegCo passage.

How are the supporting arrangements coming?

The MPFA is building a personal account registry and an electronic transfer system so trustees can process benefit transfers online. Lau argues semi-portability need not wait for the platform; the 1–3 month handover mainly gives intermediaries preparation and investor-education time, pointing to a Q4 launch after legislation.

To compare fund expense ratios, visit MPF fund comparison.