FTSE MPF Indices

The FTSE MPF Index Series was launched in 2001 by FTSE Russell in collaboration with Willis Towers Watson (WTW) and Hong Kong Investment Funds Association (HKIFA).

The FTSE MPF Index Series is based on the FTSE All-World Index Series and provides a range of country and regional indices currency hedged back into Hong Kong dollars for use by market participants in Hong Kong. The total return indices within the series are calculated net of withholding tax rates applicable to MPF funds.

The methodology for the FTSE MPF Index Series is kept in line with market participants' changing requirements through a market consultation process carried out every three years by FTSE Russell in conjunction with WTW and HKIFA.

Market consultations are designed to ensure the indices provide precise benchmarks for the market by accurately reflecting regulatory requirements, permitted investment markets and asset classes, as well as taking into consideration the specific regulatory requirements under the MPF system. Index enhancements resulting from previous consultations can be downloaded from Index Resources below.

FTSE Russell works closely with the Hong Kong Investment Funds Association (HKIFA) to ensure that the index appropriately reflects Hong Kong Mandatory Provident Fund Schemes Authority (MPFA) rules.

The FTSE MPF Fixed Income Index Series is designed to comply with the regulatory requirements governing investments in debt securities by Hong Kong Mandatory Provident Fund schemes. It incorporates additional criteria as stipulated by the Mandatory Provident Fund Schemes (General) Regulation and Guidelines on Debt Securities.

The Index Series comprises of:

• FTSE MPF World Government Bond Index
• FTSE MPF WorldBIG Corporate Bond Index

The FTSE MPF World Government Bond Index is based on the FTSE World Government Bond Index (WGBI) that measures the performance of fixed-rate, local currency, investment-grade sovereign bonds.

The WGBI is a widely used benchmark that currently comprises sovereign debt from over 20 countries, denominated in a variety of currencies, and has more than 30 years of history available.

The FTSE MPF WorldBIG Corporate Bond Index is based on the corporate subset of the FTSE World Broad Investment-Grade Bond Index (WorldBIG®), which provides a broad-based measure of the global fixed income credit markets.

Further information about FTSE MPF WGBI and FTSE MPF WorldBIG Corporate Bond Index is available in the FTSE MPF Fixed Income Index Series Ground Rules.

The FTSE MPF Reference Portfolios (RPs) are used for performance measurement and reporting purposes as set out in paragraph D2.3 of the MPFA Code on Disclosure for MPF Investment Funds.

In January 2019 the Mandatory Provident Fund Schemes Authority (MPFA) recognised the revised RPs in the Joint Submission made by the Hong Kong Investment Funds Association (HKIFA) and the Hong Kong Trustees' Association (HKTA).

The Joint Submission includes implementation of the revised RPs where FTSE Russell replaces Willis Towers Watson as the RP administrator effective from 1 April 2019.

The RPs are designed to measure cross-asset market returns for portfolios with a global market and multi-asset exposure. The RPs are constructed as an index-level composite based on underlying equity and fixed income indices calculated and maintained by FTSE Russell. The RPs also include a cash component. Further details can be found in the RPs Ground Rules.