About 36% of 313 Mandatory Provident Funds reduced their management fees from July last year to June, benefiting at least 26% of account holders, a Consumer Council study has found.

The council today said the total asset values of the 113 MPF funds with their management fees lowered were $93 billion, equivalent to 36% of all MPF fund assets.

Of the funds seeing fee reductions, 63% were in the conservative investment option, the capital preservation funds.

In terms of the percentage share of funds that cut fees, the fee reduction was considerably less in other fund types - bond funds (52%), mixed asset funds (33%), guaranteed funds (32%), and equity funds (27%).

Some funds with high management fees have remained unchanged without any downward adjustment and a more narrow fee range was found in three fund types, namely capital preservation funds, global bond funds, and balanced funds under the mixed asset fund type.

There were no changes in the management fee spreads of guaranteed funds and Hong Kong equity funds during the period under study.

Tips for consumers

The council advised MPF scheme members to check out the actual fund fees and make "like-with-like" comparisons. They should evaluate the fee level of their fund by comparing its fund expense ratio to the expense ratios of other funds or the average expense ratio of all funds within the same type.

They should also look at their own personal profile as well as other factors of the fund, including long-term performance, volatility as well as services of providers, before determining which fund to choose.

Since the MPF system has been in place eight years and more fund assets are injected into the system, further fee reductions are called for under such economies of scale.

As the Mandatory Provident Fund Schemes Authority will launch the second phase of the MPF fee comparative platform, and employees will be allowed to choose their own MPF trustees, safeguards are needed to protect the interests of scheme members.