HSBC Insurance has introduced a new product called SimpleChoice, which makes investing mandatory provident fund savings easier.
SimpleChoice will apply an automatic fund allocation based on an individual’s age, thereby making saving for retirement simpler and more effective. SimpleChoice, which is claimed to be the first of its kind in the Hong Kong mandatory provident fund (MPF) market, is designed to match a portfolio of assets with the age profiles of investors, in order to optimize returns based on the risk appetite expected during that particular stage of their life cycle.
SimpleChoice comprises of three constituent funds named capital preservation fund, global bond fund and global equity fund. Both the global bond fund and global equity fund are new funds only available under SimpleChoice.
SimpleChoice can offer an aggressive investment strategy for younger participants who can afford to take more risk and, inversely, a more conservative strategy for participants who are approaching retirement. When participants reach their age threshold, SimpleChoice automatically applies the pre-set asset allocation for the next age band.
Luzia Hung, general manager and head of employee benefits, said: People’s risk appetites and return objectives usually vary depending on their life stage. Younger investors have more time to prepare for retirement and can afford to look at growth strategies using investments with higher risk and higher return such as equities. As people approach retirement, their aim is to preserve capital and they are likely to choose less risky investments.