• 07/05/2016

Cruising your way to retirement. Funds are better managed under the Sun.

A Well-Balanced Approach Deliver a Win-Win Situation

By Edward Leung, Edited by Paul Lees

While every working person in Hong Kong is obliged to contribute a certain percentage of their income to the HK Mandatory Provident Fund (MPF), they may not be fully versed in the workings of financial markets. In its desire to close this knowledge gap, Sun Life Hong Kong has delivered a combination of easy-to-understand investment strategies that are backed up by industry-leading customer service. This dedication to excellence is reflected in the company’s winning streak at this year’s BENCHMARK Fund of the Year Awards, with a total of eight MPF fund prizes, two of which are for Hong Kong equities and six are in the Mixed-Asset category.

Furthermore, the company’s customer service proved so impressive that jurors have given Sun Life Hong Kong Best-of-Class in Business Growth Award and Intermediary of the Year – Large Advisory >100 Seats category.

A Win-Win Situation

Belinda Luk, Sun Life Hong Kong’s Senior Vice President, Pension and Group Business, sums up Sun Life Hong Kong’s award-winning client service: “Integrity and professionalism result in a win-win situation for our clients.” She added: “The MPF is a system that the workforce loves to hate, believing that it is detrimental to their interests. In reality, the MPF is an effective enabler that helps people save towards an ideal retirement.”

To achieve this win-win for its clients, Sun Life has invested in new mechanisms to help people make more informed choices. On the investment side, the company has launched the ‘Fund Cruiser’ to help MPF members adjust their investment allocation when approaching retirement. Moreover, to better assist both employers and employees, a portal called ‘MyMPFchoice.com’ provides an efficient dissemination of information.

Luk elaborated on the logic behind these moves: “Some people may not grasp the art of investment well. They tend to be more conservative when young, then become increasingly aggressive as they grow older. Therefore, we rolled out the ‘Fund Cruiser’ investment option, with an embedded auto-rebalancing mechanism that reallocates assets from 95% in equities before the age of 30, to around 30% once the client reaches 60 and beyond. The goal is to achieve a balanced fund with a bond-to-equity ratio of 3:7 by age 65. Even with excellent fund choices, we still need to offer market-leading client service to reach out and address our members’ needs.”

Other than its commitment to customer service, Sun Life Hong Kong also boasts a strong intermediary team to help educate clients on the importance of their MPF. Luk explained: “Hong Kong employers and employees still do not realize the significance of a well-managed MPF portfolio. A robust intermediary team is key to helping them understand how MPF impacts their lives. So we believe in the value of having a well-trained intermediary team that helps clients with their understanding. In addition to their initial training, intermediaries are also regularly updated on topics relating to the MPF, such as sales conduct requirements, regulations and market insights, so they can confidently carry out their duties. We also liaise with the government, helping it to improve MPF system.”

From One to Many

Sun Life Hong Kong has also introduced fundamental changes to its MPF fund investment approach that are aimed at creating better value for clients. Stanley Ngan, CEO of Sun Life Asset Management, described one of these initiatives: “In May 2016, we restructured our MPF funds along the lines of a multi-manager approach, where a constituent fund now invests in a number of underlying funds managed by different managers. This method replaced the previous feeder-fund model where the performance of a constituent fund depended solely on a single manager.”

This is not an uncommon approach among institutional investors, Ngan explained that: “I have brought my fund management experience to the MPF business and aimed to deliver better value for our clients.” He elaborated: “According to an analysis on over 400 MPF funds for the period from 2011 to 2015, 79 MPF funds started in the top quartile, but by 2012 some of them had already fallen off the chart. By 2015, none of them could stay in the top quartile consecutively for five years. This example shows that each fund has a unique investment style, and its performance is affected by changes in market conditions. Sometimes, a fund under-performs not because it is poorly managed, but rather a reflection of unfavorable market conditions against its style.”

Ngan noted: “The multi-manager approach allows for more flexibility, which will indeed deliver better value over the long term. In the Hong Kong market, mixed-asset funds and equity funds remain at the top of investors’ lists. Among all four of Sun Life’s MPF funds that received commendations at the BENCHMARK Fund of the Year Awards 2016, one of them invests in Hong Kong equities, while the other three belong to the mixed-asset category. They have performed so well that they do not just make it to the top 25% quadrant, but are first in their respective classes since launch.”

Dollar Cost Averaging

Turning to market volatility, Ngan noted that: “MPF members should be aware of a concept called ‘Dollar Cost Averaging.’ The key to any regular saving scheme is not ‘timing,’ but ‘time.’ Over time, regular investment allows our clients to acquire more units in their target fund when share prices fall.”

Citing the example of the Sun Life MPF Hong Kong Equity Fund, one of the company’s flagship MPF offerings, Ngan added: “The Fund and the Hang Seng both declined sharply at the height of the global financial crisis. By making monthly contributions, our clients were able to take advantage of lower share prices. It was good investment strategy because prices then recovered.”

Looking ahead, Stanley favors equity over debt. He has a slight preference for US equities but prefers China and Hong Kong. On the other hand, he is mildly bearish about bonds, preferring credit over government debt as US rate hikes remain a possibility.” BM



梁興仁 撰文 Paul Lees 主編

香港每位在職人士均須按入息的一定比例向「強制性公積金」(簡稱「強積金」)計劃供款;然而,未必人人都完全熟悉金融市場的運作。為彌補此知識空隙,永明金融推出了一系列易於理解的投資策略,配合業界首屈一指的客戶服務,助客戶運籌帷幄。永明金融追求卓越的精神,亦為公司帶來一連串殊榮,勇奪《指標》年度基金大獎共八項強積金基金獎項,其中兩項屬香港股票基金獎項、六項屬混合資產類別基金獎項。此外,永明金融的客戶服務十分出色,因此獲評審頒發「同級最佳 — 業務增長大獎」以及年度中介大獎中的「同級最佳獎 — 大型顧問公司(多於100位員工)」。













展望未來,相對於債券,顏建華較偏好股票。他略微看好美國股票,但更喜愛中國和香港的股票。另一方面,他輕微看淡債券,相對於政府債券,他偏好信用債券,因為美國仍有可能加息多次。 BM