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- MPFA blog - Looking back over 20 years of MPF investment
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MPFA blog - Looking back over 20 years of MPF investment
In his latest blog post, published today (15 November), MPFA Chairman Dr David Wong talked about the major developments in MPF investment during the past 20 years.
Dr Wong mentioned that when the MPF System was established, MPF investment was a brand-new concept, therefore many scheme members adopted a more conservative investment approach at the time.
As scheme members accumulated more experience and MPF assets, they looked for higher automony in managing their MPF, so the MPFA launched the Employee Choice Arrangement in 2012, which resulted in the introduction of more diversified MPF products. Over the years, MPF investment restrictions were relaxed through legislative amendments, attracting more low-fee funds and funds that offer stable returns to help scheme members counter the impact of the low interest rate environment on long-term investment. In 2017, the System made another major breakthrough by launching the Default Investment Strategy (DIS), which aims to help employees who lack the investment knowledge or time required to manage their MPF.
As the MPF System moves into its third decade, the MPFA will continue to focus on improving MPF investment choices and reviewing the relevant investment restrictions, Dr Wong continued, considering factors such as market developments, economic conditions and risk management. Among the latest developments, the MPFA recently conducted an assessment of a number of stock exchanges based on various criteria and the latest market developments. As a result, it decided to include the Shanghai Stock Exchange, the Shenzhen Stock Exchange, the Indonesia Stock Exchange and the Warsaw Stock Exchange in the list of approved stock exchanges. The proportion of MPF fund assets invested in these markets is no longer restricted by the 10% upper limit of a fund’s net asset value. In other words, investment managers have greater investment flexibility, and scheme members enjoy more diversified choices.
For the full version of the article, please visit the MPFA blog. The blog is in Chinese only.
－Ends－
15 November 2020
Dr Wong mentioned that when the MPF System was established, MPF investment was a brand-new concept, therefore many scheme members adopted a more conservative investment approach at the time.
As scheme members accumulated more experience and MPF assets, they looked for higher automony in managing their MPF, so the MPFA launched the Employee Choice Arrangement in 2012, which resulted in the introduction of more diversified MPF products. Over the years, MPF investment restrictions were relaxed through legislative amendments, attracting more low-fee funds and funds that offer stable returns to help scheme members counter the impact of the low interest rate environment on long-term investment. In 2017, the System made another major breakthrough by launching the Default Investment Strategy (DIS), which aims to help employees who lack the investment knowledge or time required to manage their MPF.
As the MPF System moves into its third decade, the MPFA will continue to focus on improving MPF investment choices and reviewing the relevant investment restrictions, Dr Wong continued, considering factors such as market developments, economic conditions and risk management. Among the latest developments, the MPFA recently conducted an assessment of a number of stock exchanges based on various criteria and the latest market developments. As a result, it decided to include the Shanghai Stock Exchange, the Shenzhen Stock Exchange, the Indonesia Stock Exchange and the Warsaw Stock Exchange in the list of approved stock exchanges. The proportion of MPF fund assets invested in these markets is no longer restricted by the 10% upper limit of a fund’s net asset value. In other words, investment managers have greater investment flexibility, and scheme members enjoy more diversified choices.
For the full version of the article, please visit the MPFA blog. The blog is in Chinese only.
－Ends－
15 November 2020
