The presentation ceremony of Morningstar Hong Kong Awards 2013 was successfully held on March 14, 2013. The Awards recognize retail funds and fund groups that added the most value for investors within the context of their relevant peer group in 2012 and over the longer term.
(Mr. Grant Kennaway, Head of Asia-Pacific Fund Research of Morningstar; Ms. Sally Wong, Chief
Executive Officer of HKIFA; Mr. Nick Cheung, Chief Executive Officer of Morningstar Asia)
Mr. Nick Cheung, Chief Executive Officer of Morningstar Asia, said, “This year is the eleventh anniversary of Morningstar Awards in Hong Kong. ‘Investors First’ is one of our core values and governs what we do every day in Morningstar; besides the Fund Awards, we are going to put more focus on projects that are closely related to individual investors, such as the continual development of our investment website, where all content are available to the public for free, including proprietary data points such as Morningstar Ratings, and various fund tools. In particular, we aim to strengthen our MPF capability in the market place. As of end of February, we have launched the re-categorization of the MPF universe and our research team will work on adding more MPF related content to the website.”
Guest keynote speaker Ms. Sally Wong, Chief Executive Officer of Hong Kong Investment Funds Association (HKIFA), shared an overview of the fund management industry in Hong Kong. She pointed out that with the expansion of RQFII pilot scheme, there will be a wider range of RMB products. She also reminded investors that apart from fees, they also need to consider volatility as well as long term performance when investing in MPF funds.
Mr. Grant Kennaway, Head of Asia-Pacific Fund Research of Morningstar, mentioned that Hong Kong has a very favorable tax system for investors. However, when it comes to disclosure, Hong Kong does not have a simplified prospectus, just a Product Key Facts Statement that does not meet the requirements of a simplified prospectus in Morningstar’s opinion. In Morningstar’s view, the best disclosure contains specific information on the fund’s risk, investment style, operations, performance, cost, and holdings; preferably in documents produced for a single fund, rather than multiple funds. As for fees and expenses, expense ratios for funds domiciled in Hong Kong are generally average to low, although the expense ratios for Fixed Income funds are high. However, expense ratios for funds available for sale in Hong Kong have high fees, with the exception of money market funds. In terms of sales channels and media coverage, he mentioned that Hong Kong lacks a wide open architecture since funds are most often sold through banks; and the media does not make a strong effort to highlight costs or promote long term investing. On the other hand, rather pleasingly, the recent implementation of the Employee’s Choice Arrangement (ECA) has spurred a lot of interest in MPFs, particularly in Chinese papers.
The Morningstar Hong Kong Awards 2013 awarded 12 categories: eight categories in Equity, and four categories in Fixed Income. The inaugural Morningstar Fund House Awards commended a Best Equity Fund House and a Best Fixed-Interest Fund House this year. For more information about the Morningstar Hong Kong Awards 2013 winner list and methodology, please click here.
