MPF fund fees comparison: Hang Seng’s “lazy fund” FER 30% dearer than HSBC’s

MPF’s biggest player Hang Seng launched its “lazy fund” Simple Choice plan three years ago — now exposed with very different fees: its funds’ average fund expense ratio (FER) runs 30% higher than parent HSBC’s, drawing Consumer Council attention and exposing how inconsistently the industry passes costs to members.

How much dearer?

MPFA website figures show Hang Seng’s Simple Choice FER 0.42 percentage points above HSBC’s — 30.43% dearer in relative terms. Market voices say a uniform standard would be fairer to Hong Kong’s 2 million-plus members.

Why the gap?

MPF involves many costs: recurring fund management fees plus one-offs like IT upgrades and heavy advertising. Some firms pass everything to members; others absorb costs — especially smaller funds, which, to avoid diluting returns, have trustees shoulder expenses themselves, including regular newspaper fund-price listings.

Does net return differ?

HSBC Insurance stresses both plans’ fund prices are identical, so members’ final returns show no difference; the market believes Hang Seng “swallowed” many costs to keep net returns competitive. But the market’s concern stands: whether members should share these costs is handled inconsistently across the industry.

What does the law say?

The MPFA responds that under the Mandatory Provident Fund Schemes (General) Regulation, trustees may periodically deduct administrative expenses from each member’s account — provided they are genuine scheme-management costs; independent auditors must verify proper accounting. Yet individual trustees decide for themselves whether to deduct from scheme assets — the very root of the inconsistent fee practices.

To compare MPF fund fees and FERs across schemes, visit MPF fund comparison.