What Are the Six MPF Fund Types and How to Compare Them?

What Are the Six MPF Fund Types and How to Compare Them?

AXA’s Lee Ping-hei set out the six in March 2011: (1) mixed-asset (lifecycle) funds, (2) bond funds, (3) equity funds, (4) conservative funds, (5) guaranteed funds, (6) money-market funds. Conservative funds are low-risk but guarantee nothing; guaranteed funds promise capital or returns only if conditions are met.

What are the three steps to compare performance?

First, match investment objective and equity-bond mix (like with like); second, compare geography (does Asia-Pacific include Japan?); third, compare risk indices — lower is better. Beyond returns, weigh fees, fund size and the trustee’s financial strength.

What did fees average?

At end-2010, average expense ratios ran 2.00% for mixed-asset, 1.74% for bonds, 1.92% for equities, 2.34% for guaranteed and 0.73% for conservative funds. Within equities, highest and lowest differed by 3.69 points.

Where to compare them all at once?

Compare MPF funds — categories, fees and track records at a glance.