Utilizing the Disclosure Tools

These disclosure tools have been developed to help you make effective MPF investment decisions. Most of the tools have been designed to help you get a better understanding about the fees and charges that apply to a fund. It is very important that you understand these fees and charges, because they are one of the key factors that you should take into account when making investment decisions across funds or across different service providers. Please click here for more information. The new disclosure tools are summarized below:

Fee Table - There is no such thing as a free lunch, and you have to pay for services received. However, it is only fair that you are able to ascertain what charges and fees are being imposed on your MPF investments. With the provision of a fee table you can see at a glance the fees and charges that relate to your MPF investments rather than having to search through a range of different documents. As the format of the Fee Table is the same across different trustees, you can also make some basic comparisons of fees and charges across different schemes and service providers.

Fund Expense Ratio - The FER will show you, as a single percentage figure, the level of fees and charges of a fund over the last year. While the Fee Table tells you in advance what the components of fees and charges will be, the FER figure will show you what they actually were over the last year. Because it is a single figure, the FER percentage is a relatively easy way of comparing costs across funds and schemes. The cost of investing in a fund or scheme is one of the key factors that you should consider when making investment decisions.

On-going Cost Illustration - Because some people prefer to think of costs in dollar terms rather than as a percentage, the OCI helps convert the FER percentage figures into dollars. It does this by showing the dollar costs of investing $1,000 in different funds over periods of one, three and five years. The OCI, which will be updated each year, is based on the FER from the previous year, and, for the purpose of comparison only, assumes an annual rate of investment return of 5%. The OCI therefore gives you a very easy basis to compare the likely costs of different funds and different schemes. It is however important to remember that the OCI is not promising 5% investment return, nor is it suggesting that the FER figure will not change over the period. Those figures are used only so that a cost illustration can be calculated on a common set of assumptions. These common assumptions provide a solid basis for comparison across funds and service providers.

Fund Fact Sheet - The FFS can be likened to the report card of a fund. When you invest your money into a fund based on the information presented in the offering document, you may wish to receive a regular report on how the fund is doing. The FFS provides you with key summary information such as fund size, latest investment objectives and policy, portfolio mix, primary holdings, fund performance, FER, fund risk, future outlook and so on. With the FFS, you can gain a better idea of how the fund has performed.