Principal to add fixed income MPF, lower fees

Principal Hong Kong is likely to add fixed income MPFs in future is targeting its Asia’s businesses to grow at a rate of 20% over the next five to ten years.

Rex Auyeung, president – Asia said the company aims to add more MPF fund choices for members, most likely fixed income related products. 

It is also looking to acquire or partner with other financial institutions while also minimising the operating costs by simplifying the existing fee structure to achieve his target.

He said the firm may reduce its MPF management fees by 10%-20% this year depending on market situations and the level of cutting the firm’s operating costs.

Auyeung added he is still targeting to increase firm’s market share for MPF  from 4.5% to 5% and to be one of the top five MPF providers in Hong Kong.

Its parent company – the US insurer Principal Financial Group, has $327.4bn in assets under management (AUM) by end-March this year with around $20bn comes from businesses in Asia.

Auyeung said the company’s AUM growth is Asia has increased at a pace of 20% in the past few years and expects to keep this growth momentum in the next five to ten years.

His strategies include expanding the existing businesses in the nine markets in Asia vertically instead of horizontally. He is focusing on China, India, Indonesia, Malaysia and Thailand which he believes they will have significant growth of middle class.