Important Notes
l Investors should consider their own risk tolerance level and financial circumstances before making any investment choices or investing according to the Default Investment Strategy. When, in selection of funds or the Default Investment Strategy, investors are in doubt as to whether a certain fund or the Default Investment Strategy is suitable for investors (including whether it is consistent with own investment objective), investors should seek financial and / or professional advice and choose the investment choice(s) most suitable for investors taking into account their circumstances.
l In the event that investors do not make any investment choices, please be reminded that contributions made and / or accrued benefits transferred into the Plan will be invested in accordance with the Default Investment Strategy, which may not necessarily be suitable for investors.
l Members should note that BCT (Pro) Asian Income Retirement Fund does not provide any guarantee on capital or investment return or dividend yield. The fund may pay dividends out of net distributable income and/or capital, which will result in an immediate decrease or adjustment in the net asset value per unit of the fund. The payment of dividends (if any) will involve an investment time-lag and is subject to out-of-market risk. There is no assurance on the dividend distribution frequency and the dividend amount/yield may fluctuate.
l The fund (including dividends distributed) are subject to the same vesting, preservation and withdrawal requirements applicable to mandatory and voluntary contributions (as applicable).
l Investors’ investment decision should not be based on this document alone. Please read the MPF Scheme Brochure for BCT (MPF) Pro Choice for further details including the risk factors.
l Investment involves risks. Past performance is not indicative of future performance. The price of constituent funds may fall as well as rise.
BCT Introduces Hong Kong’s
First Asian Income Retirement Fund that
Aims to Provide Income and Protection against Inflation
To help address the three major challenges most Hong Kong people face in planning for entering the retirement phase, including the price inflation caused by interest rate hikes, the uncertainty caused by the volatility of the investment market, and the extended retirement period due to the longevity of Hong Kong people. BCT announces the launch of the “BCT (Pro) Asian Income Retirement Fund (‘Fund’)”, Hong Kong’s first MPF fund that aims to offer stable income and protection against inflation.
The Fund will seek an expected total return of 2% above the concurrent Hong Kong Consumer Price Index. The monthly dividend[1] payout will enable members to preserve purchasing power for their daily needs after retirement. The Fund will be available in Hong Kong on 25 April 2022.
BCT Managing Director & CEO Ms. Ka Shi LAU said, “Inflation is the number one enemy of retirement. 1% increase in inflation can eat away one-fifth of the investment return in our MPF savings. The Federal Reserve has recently announced its first rate hike since 2018. We see new opportunities in the investment-grade Asian USD fixed income securities managed to weather through the past rate hike cycles and generate favourable returns. With the launch of ‘BCT (Pro) Asian Income Retirement Fund’, members can enjoy a target total return of 2% above the inflation rate to plan for a hassle-free retirement.”
The 40-year high inflation rate in the U.S. and the disruption of the global supply chain put a lot of pressure on the prices of goods imported into Hong Kong. The situation is likely to worsen in the foreseeable future. What’s more, Hong Kong has the highest life expectancy[2], which means more financial reserves are required to sustain a longer life span. A BCT survey last year showed that more than 70% of Hong Kong people[3] hope that their retirement can offer them financial independence. The Fund is mostly fixed income, with at least 70% of its net asset value (NAV) invested in Asian investment-grade USD-denominated fixed-income securities. Not more than 30% of its NAV invested in Hong Kong and Mainland China-related equity securities. With zero defaults risk recorded since 2010, Asian investment-grade USD-denominated fixed-income securities are considered relatively stable investments. The dividends distributed will be reinvested into the Fund if the members are below the age of 65 to accumulate more units for future dividends and capital appreciation.
BCT adopts an open architecture fund platform by working with numerous well-known global investment management companies. This time, with Taikang Asset Management (Hong Kong) Company Limited as the investment manager, the fund house is a subsidiary of Taikang Asset Management Company Limited (‘Taikang Asset’). A Fortune 500 company, Taikang Insurance Group-backed Taikang Asset is one of the largest pension management institutions in China, with over US$433.6 billion in total assets under management. "We are pleased to join hands with BCT on its multi-manager platform to launch the ‘BCT (Pro) Asian Income Retirement Fund’. Not only that the Fund is MPF market’s first that aims to offer both stable income and protection against inflation, but it is also our first retirement product launched in Hong Kong,” said Taikang Asset Management General Manager, Ms. ZHANG Le.
With the aim to provide “protection against inflation”, the Fund offers a balanced and stable option for MPF investment and life-long savings.
[1] It is intended that the Fund will distribute dividend on a monthly basis starting from the seventh month (or earlier as advised by the investment manager if it considers appropriate) after the launch date of 25 April 2022.
[2] According to figures from the Census and Statistics Department in 2020, expectation of life at birth is 83 years for male and 88 years for female, which has increased by about 8 years compared to that of 30 years ago.
[3] BCT commissioned an independent research institute to conduct a survey of 600 MPF account holders on “Future Life Expectations and Financial Preparation for Retirement of Hong Kong People”in May 2021.
