Press Release

HKU Survey: 80% of Hong Kong Respondents Did Not Choose DIS

Convoy’s Advice: Beware of Potential Risk and Diversify Investment into Global and Emerging Markets

 

(13 November 2017, Hong Kong) Convoy Financial Group (“Convoy” or the “Group”) has recently conducted a survey about the Mandatory Provident Fund (“MPF”) and Default Investment Strategy (“DIS”) and found that 80% of the respondents (80.1%) did not choose DIS. Nearly half of the respondents (44.9%) did not believe that DIS will outperform funds they invest in.

 

Henry Shin, CEO of Convoy Financial Services Limited, said, “It is not surprising that the public believe that their investment choices will perform better than the DIS as investment in Hong Kong is so popular. People should make their own investment decisions. DIS may be suitable for scheme members who are relatively passive in their investment approach but it is not necessarily the best MPF scheme option. Members should strive for the best investment return depending on their risk appetite.”

 

The survey was commissioned by Convoy to the Public Opinion Programme of The University of Hong Kong (“HKU”) from 19 September 2017 to 10 October 2017 and successfully asked 810 employed people, aged 20-65, who participate in the MPF scheme through a randomized telephone interview to understand their views and attitudes on MPF and DIS.  

 

Hong Kong people lack confidence in DIS, resulting DIS as a less preferred investment choice

Nearly half of the respondents (49.8%) had only one MPF account. The vast majority of respondents (80.1%) did not switch from their current MPF accounts to DIS and only a few (12.4%) chose DIS actively or passively. 44.9% of the respondents believed that their own fund investment choices outperform DIS. Additionally, among the respondents who did not switch to DIS, the main reason for not switching was that they did not understand DIS’ arrangement (35.7%). Among the respondents who switched to DIS, the main reason was they did not bother to manage their accounts (35.6%).

 

Henry Shin explained that, “Hong Kong people’s lack of confidence towards DIS could mostly be due to DIS’s short history. It’s likely that general public will change their mind gradually when more performance data is available.”

 

The Internet and APP are becoming a new trend in managing MPF accounts

Nearly 60% of respondents (59.5%) reviewed their MPF account statements via hardcopy by mail, followed by using the Internet (53.6%), mobile applications (46.1%) and MPF investment advisor (21.0%). It can be seen that it is a rising trend for Hong Kong people to use digital technologies, especially Internet and APP, to actively manage their MPF accounts.

 

Hong Kong people prefer Hong Kong and Mainland stock markets

The survey also found that among MPF investment portfolios, 54.1% of respondents selected equity funds and preferred to invest in Hong Kong (64.9%) and Mainland (40.7%) stock markets. The majority of respondents (70.0%) said they will not switch their portfolio in the next year. Even if they intended to switch (21.5%), they will switch to equity funds (36.8%) and bond funds (27.6%), and investment in Hong Kong (37.4%) and China (31.0%) market.

 

Beware of potential risk and take good advantage of various investment channels

Henry Shin said, “Every employee in Hong Kong who has an MPF account looks for the best return. The performance of different fund classes in 2017 has varied significantly, ranging from 0.1% to 37.3%. This shows that it is important for MPF scheme members to choose the right fund class. As financial globalization and geopolitical risks have made the market more volatile, investments have become increasingly difficult. Despite Hong Kong people’s preference for investing in shares, particularly in Hong Kong and the Mainland stock markets, they should review their portfolios and investment classes regularly based on different market environments and investment situations, and not limit themselves to one asset class for long-term investment. Global market conditions are expected to rise next year and therefore the public can diversify their investments into global and emerging markets.”

 

Kenrick Chung, Director of MPF Business Development of Convoy Financial Services Limited, said, “Convoy MPF Index rose by 20.9% till 8 November this year and Equity Index increased by 31.7%. The good performance of the MPF market can easily make members disregard future potential risks. It is advised that MPF scheme members who have previously benefited from equity funds should lock their profits in guarantee fund or MPF Conservative Fund, and make appropriate adjustments according to their risk appetite. In addition, the performance of MPF is linked to members’ personal management. The survey found that some respondents have more than one MPF account and it is suggested that they should consolidate their accounts as soon as possible to manage efficiently.”

 

Henry Shin added that the Group strongly supports the MPFA's launch of an electronic platform to enable scheme members to manage their MPF account conveniently. With the popularisation of the use of electronic platforms, the Group believes that it will enhance people’s awareness of managing their MPF and promote the development of the MPF market in the long run.

 

Photo Caption:

Henry Shin, CEO of Convoy Financial Services Limited (left), and Kenrick Chung, Director of MPF Development, announced the results of the survey on Hong Kong people's attitude towards MPF.