At Morningstar, we continually strive to develop new tools and products to help investors make informed investment decisions. So at the beginning of 2013, we launched the re-classification of the Mandatory Provident Fund (MPF) universe to allow investors to better compare their investment options within relevant peer groups. From there we have derived a few products, such as our monthly performance reports, quarterly MPF commentaries and quarterly quantitative trustee reports (QTR). Our website also provides powerful tools such as Quickrank to evaluate each MPF’s price, return, risk profile and more.
As an extension of our MPF initiative, we have introduced our inaugural Morningstar Best MPF Scheme Award in 2014. The Award recognizes the MPF scheme that excels in a combination of quantitative and qualitative factors. Not only should the awarded scheme have delivered the best average risk-adjusted performance across its offerings, it should also have stood out three key areas we consider to be important to MPF investors, namely product diversity, transparency and disclosure, and investor experience. For details on our methodology, please click here.
We are delighted to bestow our Best MPF Scheme Award this yearon Fidelity Retirement Master Trust (“Fidelity”). Fidelity has delivered the highest average one-year and long-term returns across all of its offerings without excessive risk. It has also consistently been one of the front runners in our quantitative trustee reports.
In addition, Fidelity satisfied many of the qualitative criteria we consider important for an MPF scheme. It offers a diverse range of MPFs, including target-date funds and index funds. It particularly exceled in the area of transparency and disclosure: Fidelity is currently the only MPF trustee that discloses the names of its managers. Similar to buying a stock such as Apple, investors are entitled to know whether Steve Jobs or Tim Cook is running the company. At Morningstar, we believe that it should be no different when investing in funds. Fidelity is also one of the very few that provides its annual report on its website. In terms of investor experience, Fidelity has a user-friendly website with a comprehensive FAQ section.
Our finalists, Principal MPF Scheme Series 800 and AIA MPF – Prime Value Choice, had different areas of strength. Principal MPF Scheme Series 800 delivered outstanding average short- and long-term returns, second to Fidelity. On the other hand, AIA MPF – Prime Value Choice exceled in the qualitative aspect by publishing monthly fund factsheets and educational material on its website.
Congratulations to our winner and finalists and we look forward to further expanding our MPF initiatives in 2014.
