MandyLo

Wednesday, January 20, 2010

Mandatory provident fund providers have room for management fee reductions, but a price war is not expected, fund adviser Gain Miles said yesterday.

BOCI-Prudential Asset Management is expected to slash management fees to less than 1 percent of assets under management, a local newspaper reported.

But Gloria Siu Mei-fung, director and general manager at Gain Miles, said a massive fee reduction in the market is unlikely.

Besides management fees, Siu said employees should select their MPF providers based on fund performance when they are expected to be allowed to do so next year.

“When evaluating MPF fund performance, both short-term return and long-term return consistency are equally important,” she said.

The Hong Kong MPF market posted a positive return of 13.87 percent last year – the highest return in a single year – based on the dollar- cost averaging calculation method.

All the 10 best performing MPF funds in 2009 were equity funds in Asia and Hong Kong, which posted growth of 30 percent to 34.7 percent.