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Duty of monitor

            The law specifies that a fund committee must appoint an asset management company to manage a provident fund and appoint a custodian to keep the fund’s assets. This is a key issue of fund governance that would create more confidence to members. After the selection, the fund committee also has responsibility to monitor these service providers

Practice

Again, the fund committee must have a guidelines manual to monitor the operation of service providers. The manual should cover these topics:
  1. Investment policy: You should examine the investment made by a fund manager whether it conforms to the investment contract or not.
  2. Asset valuation: Principally, the asset management company must calculate the daily asset value using the mark-to-market method as stated by the notice of the Association of Investment Management Companies (AIMC). Using any other appropriate calculation methods also possibly depends on approval of the fund committee.
  3. Fund performance: Generally, past performance does not guarantee future performance. However, it is an important factor that reflects the effectiveness of an asset management company. You may monitor your fund performance by comparing it with a stipulated benchmark or with those of other funds' performance.

last updated date 09/06/2553

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