Mr. Paul Chan, Chief Investment Officer, Asia ex Japan, shed lights on varies area regarding Invesco Strategic MPF Scheme.
Category Winner: Best MPF Scheme (Runner-up)- Invesco Strategic MPF Scheme
M: Morningstar P: Paul Chan
M: Have there been any changes to the fund menu in 2014? Do you plan to diversify the fund choices available on the scheme? If so, which asset classes are you thinking of adding?
P: In July 2014, as part of the selection of funds in our MPF scheme, we launched a fund which invests directly in the Tracker Fund of Hong Kong, which is an exchange-traded fund designed to provide results that is closely correspondent to the performance of the Hang Seng Index but its return may deviate from that of the Index. As for any other new products, we will always keep our eyes open for opportunities to add to our MPF scheme, considering the best interests of our clients.
M: Can you highlight any areas where you feel the scheme can improve on? Are you happy with the current disclosure practices of the scheme?
P: In December 2000, the Mandatory Provident Fund was implemented at which time Invesco started to provide its MPF scheme and, as at end February 2015, has 10 constituent funds in the scheme. For over 40 years, Invesco has been dedicated to providing pension members with investment solutions that cater to their investment needs. As an independent investment management firm, Invesco is not part of or associated with other financial institutions. Our sole focus is on investment management whereby all our resources are directed towards generating returns that meet the investment plans over the long-term for our clients. We are passionate about our clients’ success and make certain that MPF members have access to information and insight to assist them in planning their MPF investments on an up-to-the-minute basis via our various service platforms.
M: Do you have any advice for investors when selecting MPFs?
P: No single answer is right for everyone when it comes to retirement planning. What each individual chooses as his/her investment strategy is that person’s preference. The bottom line is the more time you have to achieve your investment goal, the greater amount of risk one is able to take on. The closer you are to retirement, the less risk one can afford. The higher the goal post, the more kick in your investment you will need and vice versa. With the 10 constituent funds included in our MPF scheme, we look to offer various investment choices that constitute different risk levels for different lifestyles from aggressive to conservative funds. In the long-term, investors should understand returns are a reflection of the amount of risk taken. In general, equities will outperform bonds and bonds will return more than cash in the long-term but the higher the desired return, the greater the risk.
M: What is your view regarding the introduction of a ‘default investment strategy’ and how have you been preparing for it?
P: While the intent to lower fees for the betterment of MPF scheme members may be appreciated by members on a cost basis, “good value” is not necessarily the same as a “low fee.” To make the most of the existing MPF system, we recommend MPFA and the Government consider adopting an approach similar to that adopted by the pension systems in Australia (MySuper), the UK (work-based DC pension schemes) and the US (401k plans), where those regulatory authorities regulate by way of guidelines and criteria for default fund arrangement. The MPF industry practitioners should have the flexibility to arrive at a fund design best optimizing their existing scheme/product structure within the laid down framework, for scale building and cost effectiveness purposes. In terms of preparation for the ‘default investment strategy,’ we have not reached a decision on the steps to take in preparation for a default investment strategy but will continue to the closely monitor developments regarding this issue to best determine the appropriate action.
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