MPF fund fees comparison: Manulife slashes charges as the 2012 price war heats up

Adapted from reporting originally published in March 2012.

This MPF fund fees comparison from March 2012 captures the pre–employee choice price war: Manulife — Hong Kong’s second-biggest MPF player — cut fees on five funds and launched two new ones, all effective 23 April, as trustees braced for members’ new annual right to switch.

How much did Manulife cut?

Five funds were cut: the Conservative Fund from 1.25% to 0.75% — the lowest among the top five trustees — international and Hong Kong bond funds from 1.75% to 1.65%, and two Fidelity-branded funds from 2.20% to 1.95%. Its 26 funds then charged 0.75%–1.95%. The trust’s chief executive said fees would stay competitive but declined to comment on further cuts.

What were the two new funds?

A Hang Seng Index tracker charging 0.90%, and an Asia bond fund at 1.65% allocating 10–20% to dim sum bonds across primary and secondary markets, with tenors of three to five years. The portfolio advisory head expected rapid growth in Hong Kong’s offshore renminbi issuance to deepen secondary-market liquidity, favouring bond investment.

Why did the fee war keep going?

With the “half free walk” expected that November giving employees one annual chance to move contributions, trustees were under real pressure. Fee cuts plus new launches became the standard playbook for winning business. For members, fiercer competition was good news — but fund choice still had to weigh returns and risk, not fees alone.