HK Exchange Fund reports gains

HONG KONG: Hong Kong’s Exchange Fund recorded an investment income of HK$212.7 billion (about $27.22 billion) in 2023, the Hong Kong Monetary Authority (HKMA) said Friday.

The main components include gains on bonds of HK$144 billion and gains on other equities of HK$73.2 billion.

The Exchange Fund recorded an investment return of 5.2 percent in 2023. Specifically, the Investment Portfolio achieved a rate of return of 6.4 percent.

The Backing Portfolio gained 5 percent, a post-2009 record high level of return, as a result of higher interest income on the short-term bonds alongside rising bond yields.

The Long-Term Growth Portfolio recorded an annualized internal rate of return of 11.8 percent since its inception in 2009 up to the end of September 2023.

The HKMA said the total assets of the Exchange Fund increased by HK$9.8 billion, from HK$4,008 billion at the end of 2022 to HK$4,017.8 billion at the end of 2023. Accumulated surplus stood at HK$652.4 billion at end-December 2023.

Chief Executive of the HKMA Eddie Yue said the investment performance of the Exchange Fund experienced some ups and downs but managed to achieve a decent return overall amid a complicated and dynamic investment environment.

He highlighted the positive performance of the Exchange Fund’s equity holdings and that record-high investment income from bond holdings.

Looking ahead to 2024, global financial markets will continue to face numerous challenges, Yue said, noting that the HKMA will continue to adhere to the principle of capital preservation first while maintaining long-term growth, aiming to ensure that the Exchange Fund will continue to serve its purpose of maintaining the monetary and financial stability of Hong Kong in an effective manner. (HK$1 equals $0.13)