Exchange Fund Gains $197.8b

The Exchange Fund recorded an investment income of $197.8 billion last year, with an investment return of 4.4%, the Monetary Authority announced today.

While reporting the fund’s investment results, Monetary Authority Chief Executive Eddie Yue said 2020 was a year full of unexpected twists and turns to many investors, adding that COVID-19 has posed significant challenges to the world economy.

However, driven by the ultra-loose monetary policies implemented by major central banks and a series of relief measures launched by various governments, asset markets rebounded quickly from sharp corrections, with a number of equity markets reaching record highs during the year.

For the year as a whole, the fund achieved a decent return on its equity and bond investments.

Mr Yue noted the fee payment to the fiscal reserves was $32.6 billion, while the fees on placements by government funds and statutory bodies totalled $11.5 billion in 2020.

Looking ahead, he said the main focus for 2021 will be the timing and pace of recovery of different economies.

“Global recovery is in sight as vaccines continue to be rolled out. But the evolving pandemic will still have a bearing on the global economic outlook.

“In addition, geopolitical risks remain a cause for concern. The foreign policy direction of the new US administration, developments of China-US relations as well as the implementation of the Brexit (Withdrawal) Agreement would all have an impact on the financial markets.”

Mr Yue stated that the persisting low interest rate environment could also bring additional challenges to equity and bond holdings.

The authority will manage the fund prudently and remain flexible while the fund continues to serve its purpose of maintaining financial and monetary stability in Hong Kong in an effective manner, he added.

Click here for the results.