Picking MPF funds: don’t judge by management fees alone

Many workers pick MPF funds by one number — the management fee. Cheapest wins. But judging by management fees alone can lead you astray.

Why aren’t management fees the whole story?

The fund expense ratio is the true cost. Management fees are only part of the bill — trustee, administration and audit fees all add up; the fund expense ratio (FER) captures the real total. Two funds can differ by 0.1 point on management fees but 0.5 points on FER — watching only the headline fee misses most of the cost.

What else matters?

Long-term performance is king. A cheap fund that persistently underperforms can cost you more in lost returns than you save in fees; a pricier fund that consistently outperforms compounds into a much bigger pot. Judge fees and performance together: FER for true cost, long-term annualised returns for real strength.

To compare fees and long-term performance side by side, see our MPF fund fees comparison at MPF fund comparison.