Hong Kong’s pension system has left savers paying fees for stock-index funds that are a multiple of those investors can get in the open market, contributing to a crisis of poor retirement preparation for millions of workers.
Take the biggest fund run by HSBC Holdings Plc that tracks the Hang Seng Index. With HK$35.5 billion ($4.5 billion) in assets, it’s the largest in Hong Kong’s Mandatory Provident Fund system. Savers pay an annual fee of 0.80%, compared with the 0.09% cost of an exchange-traded fund that tracks the same index. And HSBC’s offering is one of the lowest-cost available.