Guide
MPF fund expense ratio (FER) explained: what it includes and what fees cost your retirement pot
The return on your MPF depends on markets, but also on how much you pay along the way. A cost of “about 1% a year” sounds small. Over a working life it is not. This guide explains the fund expense ratio (FER), shows what funds charge now, and uses the Hong Kong MPF calculator’s method to show what fee gaps do to a retirement balance.
To try your own figures, use the Hong Kong MPF calculator.
What is the fund expense ratio (FER)?
The MPFA describes FER as a single percentage that shows the level of a fund’s fees and charges over its last financial period, shown in the scheme’s fund fact sheet.
FER = a fund’s total expenses over its last financial period ÷ the size of the fund.
Three points matter:
- What is included: mainly management fees (including administration fees for the trustee and custodian, and the fees of the investment manager) and special charges for certain fund types, such as the guarantee charge on a guaranteed fund. If a fund invests in other funds, their fees count too.
- What is not included: fees you pay directly, such as member account transaction fees.
- It is historical: FER is based on the previous financial period and does not show later changes. Funds with less than two years of history do not need to show one.
The MPFA’s own guide adds that money market funds generally charge less and equity funds more, because they are more complex to manage. Compare FERs within the same type of fund.
How much do MPF funds charge now?
From the MPFA’s MPF Fund Platform, data at 31 August 2026 (FERs are historical):
| Fund type | Funds | Average FER | Highest FER | Lowest FER |
|---|---|---|---|---|
| Equity | 169 | 1.46% | 2.03318% | 0.58317% |
| Mixed assets | 191 | 1.28% | 1.79740% | 0.58185% |
| Bond | 41 | 1.18% | 1.77967% | 0.77866% |
| Guaranteed | 9 | 1.79% | 2.87928% | 1.46784% |
| Money market: MPF Conservative Fund | 29 | 0.82% | 1.07379% | 0.66355% |
| Money market: other | 12 | 0.90% | 1.23817% | 0.56050% |
Within one type the spread is wide: the highest equity-fund FER is about 3.5 times the lowest (2.03318% ÷ 0.58317%).
The MPFA also counts funds by FER range. Funds at 1% or below rose from 123 (28.6%) at the end of 2023 to 143 (32.1%) at 31 August 2026:
| Date | 1% or below | 1.01%–1.25% | 1.26%–1.5% | 1.51%–1.75% | 1.76%–2% | Above 2% |
|---|---|---|---|---|---|---|
| End 2023 | 123 (28.6%) | 86 (20.0%) | 91 (21.2%) | 92 (21.4%) | 32 (7.4%) | 6 (1.3%) |
| End 2025 | 139 (31.2%) | 74 (16.6%) | 106 (23.8%) | 86 (19.3%) | 34 (7.6%) | 7 (1.5%) |
| 31 Aug 2026 | 143 (32.1%) | 94 (21.1%) | 124 (27.8%) | 52 (11.7%) | 28 (6.3%) | 5 (1.1%) |
Fee caps and the eMPF cut
- Default Investment Strategy (DIS) caps. For the Core Accumulation Fund and Age 65 Plus Fund, management fees cannot exceed 0.75% a year of net asset value and recurrent out-of-pocket expenses cannot exceed 0.2%, 0.95% in total. The MPFA says the out-of-pocket cap falls to 0.1% (0.85% in total) once a trustee and scheme have onboarded the eMPF Platform. The MPFA reported in May 2026 that onboarding was complete, so ask your trustee which cap currently applies to your scheme.
- eMPF fee cut. From 1 April 2026 the eMPF Platform fee fell from 0.37% to 0.29% of assets, a 21.6% cut. The MPFA says the average administration fee charged by trustees before eMPF was 0.58%, and that trustees’ administration fees cannot exceed what they pay eMPF, so the savings must be passed on to members.
How much do fee gaps change the final balance?
This example uses the same method as the Hong Kong MPF calculator: monthly compounding, contributions at the end of each month, salary growth applied once a year. The assumptions: monthly relevant income HK$20,000 (mandatory contributions of HK$1,000 each from the employee and employer), age 30 to 65, starting balance 0, salary growth 2% a year.
The calculator’s return field is after fees, so the example takes an assumed 6% return before fees and subtracts the FER (the calculator’s FER field is shown only and is not deducted again). The 6% is an illustration, not a forecast, and it ignores that different fund types earn different returns for different risk.
| Case | FER | Net return | Balance at 65 (HK$) |
|---|---|---|---|
| No fees (reference) | 0% | 6.00% | 3,402,253.84 |
| Equity: lowest FER | 0.58% | 5.42% | 3,023,458.73 |
| DIS fee cap | 0.95% | 5.05% | 2,807,189.75 |
| Mixed assets: average FER | 1.28% | 4.72% | 2,629,322.83 |
| Equity: average FER | 1.46% | 4.54% | 2,537,861.08 |
| Equity: highest FER | 2.03% | 3.97% | 2,271,948.32 |
Total contributions are HK$1,122,799.68 in every row, so the whole difference is fees.
- Lowest vs highest equity FER: HK$751,510.41 difference; the high-FER balance is about 24.9% lower.
- Average equity FER vs lowest: HK$485,597.65.
- The DIS cap (0.95%) vs the average mixed assets fund (1.28%): HK$177,866.92.
On a HK$500,000 balance, one year’s fee at FER 0.58% is HK$2,900; at 0.95% HK$4,750; at 1.46% HK$7,300; at 2.03% HK$10,165.90.
What is the eMPF cut from 0.37% to 0.29% worth?
It is 0.08 percentage points. If it passes fully into a mixed assets fund’s FER (1.28% to 1.20%), the net return goes from 4.72% to 4.80% and the age-65 balance rises by HK$41,883.05, about 1.6%, from HK$2,629,322.83 to HK$2,671,205.88. Your actual gain depends on how your fund adjusts its charges and when its FER is updated.
How do you compare fund fees sensibly?
- Compare FERs only for funds with a similar risk class and objective.
- Use the MPFA’s MPF Fund Platform for the average, highest and lowest FER in each type.
- Look at long-term performance after fees, not fees alone.
- Check fees you pay directly, which FER leaves out.
- Before switching funds, check for switching charges and whether the new fund’s risk suits you.
To understand your contributions and tax deduction, see how MPF contributions work and MPF tax deduction in Hong Kong.
FAQ
Is a lower FER always better?
Not necessarily. FER measures cost, not return or risk. Compare funds in a similar risk class with similar objectives, then look at long-term performance after fees. A cheap fund that keeps lagging comparable funds is not automatically the better deal.
Is FER the fee I am actually charged each year?
It is a good guide to the fund-level expenses, but it is a historical figure based on the previous financial period, so it does not show later fee changes. It also leaves out fees you pay directly, such as account transaction fees. Check the scheme brochure and fund fact sheet for current charges.
Do I need to do anything about the eMPF fee cut?
No application is needed. The eMPF Platform fee fell from 0.37% to 0.29% on 1 April 2026, and the MPFA says trustees’ administration fees cannot exceed what they pay eMPF, so the saving must be passed on to members. Watch for trustee notices and check the latest fees in the fund fact sheet.
Are there fee caps if I use the Default Investment Strategy?
Yes. For the Core Accumulation Fund and Age 65 Plus Fund, management fees are capped at 0.75% a year of net asset value and recurrent out-of-pocket expenses at 0.2%, 0.95% in total. The MPFA says the out-of-pocket cap falls to 0.1% once a trustee and scheme have onboarded eMPF, so confirm the cap that applies to your scheme with your trustee.
Sources
Checked on 2026-10-10. The balance examples were computed in Python with the Hong Kong MPF calculator’s method and match that calculator’s default example (HK$2,679,705.09).
- MPFA, MPF Fund Platform, Analysis of FER (funds, average, highest and lowest FER by type, and FER ranges; data at 31 August 2026)
- MPFA, Disclosure of Information (definition of FER)
- MPFA, Fees and Charges guide (what FER includes and excludes; historical figure)
- MPFA, Default Investment Strategy fee caps
- MPFA press release, eMPF fee reduced to 29 basis points starting 1 April, 23 March 2026
- MPFA press release, MPFA Chairman’s Blog: eMPF achieves full onboarding, 3 May 2026
Related: Hong Kong MPF calculator, how MPF contributions work.
This article is general information, not financial, investment or tax advice, and not a fund recommendation. See the disclaimer.