BCT launches two new constituent funds
22 June 2012
News, Asia, Hong Kong
One of Hong Kong’s largest MPF service providers and trust companies, BCT, comprising both BCT Financial and Bank Consortium Trust, announced the launch of a new ‘market tracking series’ on June 21, with the launch of two constituent funds set for June 28.
"The one single platform offers our members the flexibility with fund choices (other than those actively managed funds) covering a wide spectrum of risk and return levels under one scheme, and thus avoiding the out-of-market risk facing members that transfer from one scheme to another," says BCT's managing director and CEO, Ms Ka Shi Lau. "The management fees of the new funds are among the lowest in their relevant peer groups. Besides, the funds track the relevant equity market indices and the expected investment results will generally correspond to the performance of the equity markets. This would relieve the concerns of those members, who would like to capture the general market movement, but with no preference in the selection of individual stocks."
The two equity funds are expected to bring lower management fees, just 0.99% p.a. of NAV according to data from the Mandatory Provident Fund Schemes Authority, for fee levels that are among the lowest in the peer group. The funds are also expected to bring greater diversification capabilities, and thus improved overall equity fund performance, offering possible exposure to nearly 1,000 individual stocks.
"The BCT (Pro) World Equity Fund covers more countries and greater number of stocks than the FTSE MPF World Index," said Ms. Lau. "It has a greater allocation of investments in developing markets of Asia, Brazil, South Korea and the Greater China region, which hopefully serve to minimize the impact and subsequent uncertainty arising from the global financial crisis / recent European debt crisis."
In addition, the move offers the SAR’s retirement planners extensive exposure to China stocks, allowing them to capture expected continued gains there over the coming years.
Constituent funds under the current Bank Consortium MPF Plan are now classified into five categories, comprising market tracking series, equity funds, target date funds, mixed asset funds, and low-risk funds.
In turn, the market tracking series comprises the existing BCT (Pro) Hang Seng Index Tracking Fund, as well as the BCT (Pro) Greater China Equity Fund and the BCT (Pro) World Equity Fund.
In a bid to educate retirement planners about the full capabilities of the investment options being offered to them, particularly contrasting the various risk-reward profiles, BCT has established a number of new programmes, including road shows, video clips, and carnivals.
"Since the funds have just been launched on 28 June and are new to the MPF market, the response is yet to be seen," says Ms. Lau. But given that both constituent funds are within the lowest fee groups in their respective categories and that both offer great diversification, it is expected that these funds would be of interest to a large number of our members. One of our objectives for launching these new funds is to offer members a low cost option to get market exposure in the world equity as well as the fast growing Greater China region."
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