Open architecture, an emerging trend in the Mandatory Provident Fund system in which providers put rivals' funds on their platforms, has received another boost. American International Assurance (AIA) and JF Asset Management, which have a joint venture master trust for MPF members, are introducing three lifestyle funds from Allianz Global Investors, which runs its own MPF master trust business.
This move follows the announcement at the start of the year by Axa China Region that it would provide members with a range of fund choices based on a multi-manager platform run by Australia-based iPac, as well as by informal noises from Fidelity Investments that it plans to allow third-party funds onto its MPF platform later this year.
AIA-JF chose the three Allianz products - the RCM Growth Fund, the RCM Stable Growth Fund and the RCM Capital Stable Fund - because of their good performance over the five-year lifespan of the MPF regime.
Mark Konyn, CEO at AllianzGI in Hong Kong, notes that the Stable Growth Fund and the Capital Stable Fund have won the most recent three-year risk-adjusted performance awards in AsianInvestor magazine.
Peter Crewe, vice president and regional pensions director at AIG Global Pensions, says, "Scheme members now have a better understanding of the MPF system and know how to make choices. They are looking for additional investment options and that is why we thought the time was right to broaden our investment options by offering multi-manager products."
This also represents a gradual expansion of AIA-JF's product offerings under the MPF umbrella. It launched its master trust in 2000 with five basic portfolios. In 2002 it added four regional equity funds, and last year introduced the first Greater China equity fund for MPF members as well as an Asian equity product.