MPF fund fees comparison: Manulife cuts charges and launches dim-sum-bond fund

This is a rewrite of a report from March 2012.

Ahead of the MPF employee-choice launch in November 2012, the second-largest trustee made a two-pronged play: cutting management fees on selected funds to as low as 0.75 per cent, and launching two new funds — including an Asia Pacific bond fund putting up to a fifth of its portfolio into offshore renminbi “dim sum” bonds, a first for the industry at that weight.

How much did Manulife cut its MPF fees?

Cuts of 10 to 50 basis points left its 26 funds charging between 0.75% and 1.95%. The two new funds charge 0.9 per cent (Hang Seng Index tracker) and 1.65 per cent (Asia Pacific bond), the latter aiming to capture bond yields plus renminbi appreciation.

Should members chase the dim sum bond theme?

An industry adviser cautioned against picking funds on currency alone: MPF is a decades-long investment, the renminbi cannot rise forever, and bond funds have never been the popular choice — enquiries spiked during 2011’s market slump but faded as equities rebounded. Match the fund to your risk tolerance first.

What did rivals make of the price war?

Industry watchers saw the cuts as catching up rather than undercutting, and possibly the last round before the employee-choice era. At the time, the cheapest fee among the top five trustees was BOC-Prudential’s Hang Seng Index fund at 0.7 per cent; market leader HSBC held its lowest fee at 0.79 per cent with no change planned. Use an MPF fund fees comparison to check charges fund by fund.