Default Investment Strategy

What is Default Investment Strategy (“DIS”)?

✓ DIS is intended to be one ready-made, low-fee investment solution;
✓ It is made up of two constituent funds: Core Accumulation Fund (“CAF”) and Age 65 Plus Fund (“A65F”);
✓ Its three main features are: fee control, automatic de-risking, global diversified investment;

Understand DIS

✓ From 1 April 2017, future investment from MPF members who do not make their own choice of MPF funds, will be invested through the DIS;
✓ DIS will manage investment risk exposure by automatically reducing risk for members as they get older;
✓ CAF will invest around 60% assets in higher risk assets, such as global equities, and 40% in lower risk assets, such as global bonds;
✓ A65F will invest 20% in higher risk assets and 80% lower risk assets;
✓ In addition to the above nature of investment under CAF and A65F, DIS does not have guaranteed element as in the previous default fund;
✓ Contributions made by members before age 50 will be fully invested into the CAF. When member reaches age 50, DIS will start automatically moving some investment from CAF to A65F every year;
✓ This de-risking process will continue until members reach age 64 when all assets will be invested in A65F;
✓ Management fees of CAF and A65F are capped at 0.75% p.a., plus recurring out of pocket expenses at 0.2% p.a.;
✓ MPF members can also choose to invest through the DIS if they find the funds suitable;
✓ However, no de-risking will take place if members invest in CAF or A65F as standalone fund choices;
✓ MPF members can switch in and switch out of DIS anytime via the usual fund switching channel.
For further details including fund switching, fees and charges, product features and risks involved, please refer to the MPF Scheme Brochure of AIA MPF – Prime Value Choice.