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Investor Survey: Commissioned by the Hong Kong Investment Funds Association: focusing on MPF related issues

Background and methodologies

  • Conducted by Cimigo in November 2020 via on-line questionnaire
  • Respondents: 840+ Hong Kong residents who are aged 25-65 years old, with monthly personal income of HK$30,000+ or liquid assets of HK$500,000 or above.

Key findings

  • China A-shares funds in MPF – 53% of the respondents believe that MPF should have China A-shares funds; 18% are neutral.

Reasons for support:

Amongst the respondents who express support, 61% believe that the China economy is an important driver of the global economy in the future.

As for those who have reservations, the key reasons cited relate to the outlook of Rmb and the corporate governance of A-shares companies.

  • Respondents believe that to be meaningful, 25% of a MPF fund should be allocated to the China A-shares market.
  • Around 2/5 of the respondents opine that China A-Shares are attractive.

Key reasons: 42% cite that China economy is an important driver in the global economy.  19% are positive about the long term outlook of RMB.

Those who do not find A-shares attractive are primarily due to the lack of understanding of the regulatory framework and the operation of the market – the three most often cited reasons evolve around this theme.

  • 43% of the respondents believe MPF should include new economy funds.
  • Most respondents make MPF investments via websites (35%) or apps (11%).

Respondents typically download account statements and other documents via the internet (46%).  Millennials (23%) are more inclined to do it via apps.

  • On average, 36% of the respondents check their MPF accounts once every month.  20% do it on a quarterly basis.   But when it comes to adjusting the portfolios, the frequency is lower: 15% do it half-yearly, and only 19% do it more frequently.  30% of the baby boomers have never checked/changed their portfolios.

The key trigger for a change in the portfolio is when respondents believe that there are better investment opportunities (53%)

  • Amongst the various products that enjoy tax incentives, respondents are more inclined to purchase VHIS (34%).  The level of interest in QDAP and MPF TVC is similar, with each at about 23%.   In general, baby boomers are less inclined to purchase these products.
  • As to what will attract respondents to increase MPF TVC, the key factors cited are an increase in tax allowances (23%), a reduction in fees and charges (21%), and the ability to withdraw MPF earlier (21%).   42% of the millennials would consider increasing the contributions if the benefits can be used to purchase properties.
  • As to whether the personal data of employees could be shared within the Group, around 27% think it is acceptable, 34% are neutral; and 39% do not find it acceptable.

The way forward (Key proposals put forward by HKIFA to further enhance the MPF system)

  • Further relax investment restrictions: so as to increase the array and diversity of products being offered, and this is not just for the accumulation phase, but for decumulation too.
  • Disaggregate the tax benefits for MPF TVC and QDAP, i.e. HK$60,000 for each – to let the complementary roles of two schemes to come into full play.
  • Adopt electronic/digital means as the default mode for dissemination of MPF materials: to help reduce costs and to increase the level of engagement by employees; and to complement the launch of the eMPF platform.
  • Allow trustees to make available employees’ data amongst Group companies, subject to employees’ prior consent and stringent safeguards on the protection of data privacy. This will enable them to take a holistic approach and offer a total retirement solution for employees.
19 05 2024 02:59:26am