MPF providers line up yuan funds ahead of semi-portability land-grab

(Editor’s note: this report was originally in English and is rewritten in Chinese per this site’s practice.)

MPF providers expect more yuan-linked funds to launch on the back of next year’s Employee Choice Arrangement (semi-portability) — and several plan to steal a march on rivals by launching sooner.

What are providers planning?

Principal International plans one to two new index funds for its MPF scheme by end-2010. At Gain Miles’ “MPF Forum 2010”, Principal’s Greater China COO Keith Yuen said the firm would also widen distribution channels so members can reach its MPF products more easily once Member Choice lands in 2011.

Why yuan funds?

Mini-QFII hopes make yuan bond funds feasible. Bank Consortium Trust investment director Eddie Lam expects more yuan-linked funds on anticipated mini-QFII; providers could buy yuan bonds in the market to build yuan bond funds for members. He cautions, though, over limited yuan-bond supply and the yuan’s thin Hong Kong liquidity.

What will semi-portability bring?

Fiercer competition — and lower fees. Gain Miles’ Gloria Siu believes Member Choice will intensify rivalry among providers, ultimately cutting charges. For workers, more choice plus lower fees is a tangible win.

To explore existing MPF fund types, visit MPF fund comparison.