Hong Kong Shue Yan College ECON 310 Financial Institutions in Hong Kong Term Paper 2006 Fall - PowerPoint PPT Presentation

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Hong Kong Shue Yan College ECON 310 Financial Institutions in Hong Kong Term Paper 2006 Fall
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Hong Kong Shue Yan College ECON 310 Financial Institutions in Hong Kong Term Paper 2006 Fall

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  1. Hong Kong Shue Yan CollegeECON 310Financial Institutions in Hong KongTerm Paper 2006 Fall

  2. The Comparison between the MPFs provided byBank (HSBC) and Insurance Company (Manulife)

  3. Section 4, Group 6 • 044012 Christy, Cheung Wai Hung • 044013 Annie, Chong Suet Yan • 044018 Roxanne, Yu Kwan Yee • 044028 Carrie, Ho Ka Lai • 044040 Quin, Leung Pui Shan • 044052 Katy, Lee Wai Kit

  4. Introduction of MPF pension plan

  5. What is a pension plan? • an asset pool • represent the fastest-growing financial intermediary.

  6. Reasons pension plan becomes popular • Life expectancy increase • Ageing problem

  7. Type of pension plans • Private Pension Plans • Public pension Plan • Sponsored by a governmental body. e.g., MPF

  8. Public pension Plan Mandatory Provident Fund (MPF)

  9. Key features of the MPF • Coverage and Exemption • Coverage: Employee, Employer, Self-Employed Person • Exempt persons: Domestic employees, Self-employed hawkers;

  10. Key features of the MPF • Contributions • Both employers and employees pay a minimum contribution of 5% of relevant income • Self-employed persons have to contribute 5%.

  11. Key features of the MPF • minimum and maximum levels of relevant income are: • Minimum - HK$4,000 per month • Maximum - HK$20,000 per month • can withdraw accrued benefits in a lump sum at the age of 65

  12. Key features of the MPF • Immediate Vesting Contributions paid and investment earnings are fully and vested with the member as accrued benefits.

  13. Key features of the MPF • Portability When a member changes job, benefits can be transferred • Preservation Benefits will be preserved and became payable at age of 65 or die

  14. Description of HSBC and Manulife Background of HSBC

  15. Background of HSBC • one of the world’s largest banking and financial services organizations • operated in Hong Kong more than 140 years • has over 9,700 offices in 77 countries and territories

  16. Background of HSBC • The leader position in the pension market • HSBC and subsidiary Hang Seng Bank have secured 400,000 employees for MPF • 40% targeted market share in the MPF business.

  17. MPF Product in HSBC • HSBC offers two master trust schemes • SuperTrust • SuperTrust Plus

  18. SuperTrust MPF Scheme • members with less investment experience • investment time frames from short to long term

  19. SuperTrust MPF Scheme • 5 different funds • Capital Preservation Fund (low-risk) • Guaranteed Fund (low-risk) • Balanced Fund (medium-risk) • Growth Fund (high-risk) • Hang Seng Index Tracking Fund (high-risk)

  20. SuperTrust Plus MPF Scheme • members with a greater investment knowledge and experience • In addition to 5 SuperTrust Funds, it offers 5 more funds

  21. SuperTrust Plus MPF Scheme • Stable Growth Fund (medium-risk) • Asian Equity Fund (high-risk) • European Equity Fund (high-risk) • Hong Kong Equity Fund (high-risk) • North American Equity Fund (high-risk)

  22. HSBC MPF Service • Quality MPF Management • Keeping information up to date • Smart Money Management and Fund Switching

  23. HSBC MPF Service • providing convenient communication • Hotline • Website • Branch and ATM network

  24. Description of HSBC and Manulife Background of MAULIFE

  25. Background of MAULIFE • conducts business in Hong Kong for more than 100 years • expanded into MPF market since 2000 • one of the largest player in the MPF market (15.5% market share)

  26. Background of MAULIFE • more than 720,000 pension accounts • managing pension assets at about HK$307 billion

  27. MPF Product in MANULIFE • Two MPF schemes • Manu-Lifestyle (MPF) Scheme • Manulife Global Select (MPF) Scheme

  28. Manu-Lifestyle (MPF) Scheme • provided to conservative investors • Simple and efficient approach

  29. Manu-Lifestyle (MPF) Scheme • 5 different Funds • Capital Preservation Fund • Interest Fund • Stable Fund • Growth Fund • Aggressive Fund

  30. Manulife Global Select (MPF) Scheme • provided to sophisticated and conservative investors • offers a choice of investment expertise and extensive range of funds

  31. Manulife Global Select (MPF) Scheme • provides eleven more funds than Manu-lifestyle Scheme • provide a very aggressive high-risk option • Manulife MPF China Value Fund

  32. Manulife MPF Service • computerized call center • personal visits • customer-oriented seminars

  33. Manulife MPF Service • Newsletters • regular benefit statements • on-line service centre • Smart Call telephone service.

  34. Comparison between the MPF Scheme of HSBC and Manulife

  35. III. Comparison between the MPF Scheme of HSBC and Manulife • Two MPF Scheme • Low-risk Fund • Medium-risk Fund • Aggressive High-risk Fund

  36. Manu-lifestyle Scheme vs. HSBC Super Trust Scheme

  37. Manu-lifestyle Scheme vs. HSBC Super Trust Scheme • provided to conservative investors • provided to less investment experience investor

  38. Manu-lifestyle Scheme vs. HSBC Super Trust Scheme • Conservative Low-Risk Fund • Manulife • Capital Preservation Fund • Interest Fund • HSBC • Capital Preservation Funds • Guaranteed Fund

  39. Manu-lifestyle Scheme vs. HSBC Super Trust Scheme • Capital Preservation Funds • mandated by the MPF Schemes Ordinance • do not have a guarantee of capital and interest

  40. Manu-lifestyle Scheme vs. HSBC Super Trust Scheme • invest in grade Hong Kong dollar denominated monetary instruments

  41. Manu-lifestyle Scheme vs. HSBC Super Trust Scheme • Manulife Capital Preservation Fund • mainly hold Hong Kong Bonds • stable return as the prescribed savings rate published by the MPFA • HSBC Capital Preservation Fund • 100% hold in Hong Kong dollar denominated monetary instrument • achieve a rate of return higher than the average bank saving rate

  42. Manu-lifestyle Scheme vs. HSBC Super Trust Scheme

  43. Manu-lifestyle Scheme vs. HSBC Super Trust Scheme • Manulife MPF Interest Fund • fully hold in Hong Kong Bonds • interest rate is determined by the bond interest • HSBC Guaranteed Fund • nearly 50% hold in equity • provide 0.25% interest rate per annually

  44. Manu-lifestyle Scheme vs. HSBC Super Trust Scheme • conservative medium-risk fund • Manulife MPF Stable Fund vs. HSBC Balanced Fund • Provide capital growth

  45. Manu-lifestyle Scheme vs. HSBC Super Trust Scheme • HSBC invest more equity than Manulife

  46. Manu-lifestyle Scheme vs. HSBC Super Trust Scheme • Manulife MPF Stable Fund • mainly in bonds • with an interest guarantee upon the occurrence of certain pre-determined events • HSBC Balanced Fund • Assets Portfolio mainly in equity • No interest guarantee

  47. Manu-lifestyle Scheme vs. HSBC Super Trust Scheme • Compare the Aggressive high-risk fund • Manulife • Growth Fund • Aggressive Fund • HSBC • Growth Fund • Hang Seng Index Tracking Fund

  48. Manu-lifestyle Scheme vs. HSBC Super Trust Scheme

  49. Manu-lifestyle Scheme vs. HSBC Super Trust Scheme • Growth Funds • helped to maximize the investment return • mainly in equity

  50. Manu-lifestyle Scheme vs. HSBC Super Trust Scheme • Manulife Aggressive Fund vs. HSBC Hang Seng Index Tracking Fund • Provide long term capital growth