What is the MPF fund expense ratio? A quick guide to MPF fund fees comparison

This is a rewrite of a report from March 2012; the original was a short fund-knowledge column.

FER comes up constantly in MPF discussions — what does it actually mean? The fund expense ratio is a fund’s total expenses as a percentage of its assets. In plain terms: how many per cent of your money the fund costs each year.

What goes into the MPF fund expense ratio?

FER captures the fund-level expenses as a share of assets, but excludes charges you pay directly, such as transaction fees taken from your account. It is the handiest single number for comparing fund costs — but it is not the whole cost picture.

Why does FER matter so much?

Because fees eat directly into your net return, and FER is the simplest way to compare costs across funds. Note that published fund returns are already net of the charges inside FER. When choosing, use the MPFA’s fee comparison platform to line up FERs of similar funds, then weigh risk and track record alongside — don’t pick on price alone.