FTSE Group (“FTSE”), the award winning global index provider and Hong Kong Investment Funds Association (“HKIFA”) today announce changes to the FTSE MPF Index Series, resulting from the market consultation held in late 2010. The consultation, part of a three-year regular cycle, is designed to ensure the FTSE MPF Index Series continues to meet the requirements of the market and provides the most accurate and relevant benchmarks for the Hong Kong investment community.
In response to market feedback from the consultation, FTSE will continue to align the FTSE MPF Index Series with the updated framework set out by the Mandatory Provident Fund Schemes Authority. As a result, stapled securities and those Real Estate Investment Trusts (REITs) not authorised by the Hong Kong’s Securities and Futures Commission (“SFC”) will be removed from the index series. Additionally and as a result of the consultation findings, FTSE will create a hedged version of the FTSE MPF Emerging Markets Index. The changes will continue to reflect the investable universe set out within the MPF framework, and take effect from the start of business on 21 March 2011. The next market consultation will be conducted in 2013.
Since the MPF Scheme was implemented in 2000, the number of MPF funds and AUM has grown rapidly to 421 funds and HK$365.4 billion1 respectively. The MPF Scheme has undergone continuous development in the last decade and will soon allow members to choose their own MPF fund providers for their mandatory contributions during their current employment. As a result, MPF benchmarks will become increasingly important to members, in order for fair and objective comparison between fund providers.
Jamie Perrett, Director, Index Research, Asia, FTSE Group, said, “Through regular market consultation, the FTSE MPF Index Series continues to evolve in line with the specific requirements of Hong Kong fund managers. FTSE will continue to work with the HKIFA and Towers Watson in providing the most relevant and accurate benchmarks for the MPF Scheme.”
Sally Wong, Chief Executive Officer, Hong Kong Investment Funds Association, said, “We are delighted to work with FTSE Group as well as other stakeholder groups to continuously enhance the MPF benchmarks. The objective is to enable fund managers to readily capitalise on the investment opportunity sets that are permitted within the MPF framework, so as to develop products that can cater for the retirement needs of employees in Hong Kong. With the implementation of “Employee Choice Arrangement”, we believe that the MPF benchmarks will become an increasingly important reference point for MPF members when they compare service providers.”
FTSE has calculated the FTSE MPF Hong Kong Index Series since 2001, when it was selected by Towers Watson and the HKIFA to create a range of country and regional benchmarks hedged into Hong Kong Dollars, for the local investment community. The FTSE All-World Index Series was chosen as the base universe and customised to meet the regulatory requirements of the Mandatory Provident Fund Schemes Authority as well as the investment needs of employees.
For more information on the series, please visit www.ftse.com/hkmpf.
For more information on Hong Kong Mandatory Provident Funds, please visit http://www.mpfa.org.hk/
For more information on the list of SFC authorised REITs, please visit http://www.invested.hk/ProductList/searchProduct/REIT.do?lang=EN
1Mandatory Provident Schemes Statistical Digest, December 2010
