What is an MPF “multi-manager” structure? Explained

When choosing your MPF portfolio, you may have come across the term “multi-manager”. What does it actually mean — and how does it differ from the traditional single-manager setup? An AXA retirement executive unpacked the increasingly popular model in a 2011 column.

What is an MPF multi-manager structure?

An MPF multi-manager structure means the trustee appoints more than one fund manager, dividing responsibilities by asset class or region. Unlike the single-manager model, where one manager runs every fund, the multi-manager approach lets specialists in bonds, equities and other areas each handle what they do best, supporting steadier long-term returns.

The two models compared:

Different managers compensating for each other’s weaknesses

The multi-manager concept exists so that professionals manage the areas they know best, lifting potential returns. As markets matured and members demanded more from their MPF investments, trustees progressively adopted the model. Because managers differ in style and expertise, picking stronger performers in each category helps capture opportunities and reduce risk — while also letting members choose managers whose approach they prefer.

Rigorous selection — and a replacement mechanism

Selection follows a strict vetting process: hiring criteria go beyond investment performance to cover the manager’s experience, risk-management strategy, team stability and investment style. Many trustees also build in a manager-replacement mechanism — if a manager’s performance seriously falters, key management or investment personnel change, the investment style drifts, assets under management shift materially, or other incorrigible problems arise, the trustee can replace the manager to sustain overall fund performance and protect members’ interests.

To learn about the different types of MPF funds, visit the MPF education hub.