Reference Portfolios for Constituent Funds under the Default Investment Strategy
After due consultation with the respective memberships and the Mandatory Provident Fund Schemes Authority (MPFA), the Hong Kong Investment Funds Association (HKIFA) and the Hong Kong Trustees’ Association Limited (HKTA) have worked with Willis Towers Watson (WTW) to develop the reference portfolio (RP) for each of the constituent funds under the Default Investment Strategy (DIS). Effective 1 April, 2019, FTSE is the RP benchmark administrator.
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For the purposes of paragraph 18 of Guidelines III.14 on the DIS, we set out below the RPs for each of those constituent funds, namely, the Core Accumulation Fund (CAF) and the Age 65 Plus Fund (A65F) which have been recognised for this purpose by MPFA. The RPs are used for performance measurement and reporting purposes as set out in paragraph D2.3 of the MPFA Code on Disclosure for MPF Investment Funds.
- RP for CAF: 60% FTSE MPF All-World Index (HKD unhedged total return) + 37% FTSE MPF World Government Bond Index (HKD hedged total return) + 3% cash or money market instruments providing a return at MPF Prescribed Savings Rate (HKD unhedged total return)*
- RP for A65F: 20% FTSE MPF All-World Index (HKD unhedged total return) + 77% FTSE MPF World Government Bond Index (HKD hedged total return) + 3% cash or money market instruments providing a return at MPF Prescribed Savings Rate (HKD unhedged total return)*
* Inclusive of re-investment of dividends/coupons/other incomes. The reference portfolio is reported net-of fees on a calendar day basis, assuming a payment of services (e.g. management fees) of 0.75% p.a. of NAV and out-of-pocket expenses of 0.20% p.a. of NAV.
Proportions by asset classes (%)
||FTSE MPF All-World Index (HKD unhedged total return)
||FTSE MPF World Government Bond Index (HKD hedged total return)
||MPFA Prescribed savings rate
|FTSE MPF DIS Core Accumulation Fund RP (FRMPFCAF)
|FTSE MPF DIS Age 65 Plus Fund RP (FRMPFAPF)
RP Performance Disclaimer:
The Reference Portfolio for each of the constituent funds under the Default Investment Strategy (“Reference Portfolio”) is calculated by FTSE Russell using the data contained in the FTSE MPF All-World Index (the “FTSE Index”) and the FTSE MPF World Government Bond Index (the “FTSE FI Index”). The FTSE Index is owned by FTSE and/or its licensors. The FTSE FI Index is owned by FTSE FI and/or its licensors.
“FTSE®”, “Russell®” and “FTSE Russell®” are trademarks of the London Stock Exchange Group companies and are used by FTSE Russell under licence. Neither FTSE Russell nor its licensors or affiliates are connected to or sponsor, advise, solicit, recommend, endorse or promote the Reference Portfolio or accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error or omission in the Reference Portfolio, FTSE Index or FTSE FI Index (collectively, the “Index Materials”); or (b) the calculation or operation of, reliance on, or any use made of, the Index Materials. Neither FTSE Russell, nor its licensors or affiliates make any claim, prediction, warranty or representation as to the results to be obtained from the use of the Index Materials, or give any representations or warranties of merchantability or fitness for a particular purpose regarding the Index Materials or their accuracy, adequacy, completeness or availability.