On 5 March, we will announce our annual Morningstar 2019 Fund Award winners. The core methodology remains the same, and as always, there will be three types of awards given: Category Awards, Fund House Awards and the Best MPF Scheme Award.
Category Awards and Fund House Awards
The awards retain the same methodology combining quantitative scoring with the qualitative judgment of our analyst team. They are designed to recognize strong performance during the year in question, but they do not simply reward one-year returns. Indeed, the best funds over one year have all too often just gotten lucky rather than demonstrated real skill. We therefore evaluate three and five years of history in our awards process and it takes more than strong returns to merit consideration. We also place a heavy emphasis on risk in our calculation and our analysts look at factors such as the consistency of returns, changes to management and outsized risks that might be embedded in the portfolio. You can read the full methodology here.
Best MPF Scheme Award
The Morningstar Best MPF Scheme Award recognizes the MPF (mandatory provident fund) scheme which excels across the key qualitative and quantitative factors which we believe are important when selecting a retirement scheme. Our preferred schemes are those which deliver strong average risk-adjusted performance across its offerings, offer competitive fees, and have a keen consideration for product diversity, transparency and disclosure, and investor experience.
There has been a stronger focus on fees both from the regulator and market participants. A number of MPF providers have been voluntarily slashing management fees in 2018, including some of the biggest MPF sponsors in Hong Kong. Since 2018, we have assigned a 20% weighting factor for fee assessment in our overall evaluation, which takes each scheme’s average cost compared to its peers into consideration, to reflect the importance of fees when it comes to MPF scheme selection. You can read the full methodology here.
Awards in 2019
Morningstar Category Awards
Equity:
• Asia-Pacific Equity (Asia ex Japan Equity, Asia-Pacific ex Japan Equity, Asia-Pacific inc. Japan Equity, Asia-Pacific ex-Japan Equity Income)
• Global Equity (Includes all Global Large Cap style categories, Global Equity-Income, and Global Flex-Cap)
• Greater China Equity (China Equity and Greater China Equity)
• Hong Kong Equity
Fixed Interest:
• Asia Bond (Asia Bond and Asia Bond – Local Currency)
Morningstar Fund House Awards
• Morningstar Best Equity Fund House Award
• Morningstar Best Fixed-Interest Fund House Award
Morningstar Best MPF Scheme Award
Stay tuned with the winner announcement and winner features on our website in March.
View all Morningstar Hong Kong Fund Awards 2019 articles here.
