Bonds, Real Estate Prop Up Exchange Fund

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2019-01-29 HKT 17:49

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  • HKMA boss Norman Chan says the new year will continue to see volatility in the markets. Photo: RTHK

    HKMA boss Norman Chan says the new year will continue to see volatility in the markets. Photo: RTHK

The government's Exchange Fund has posted an investment gain of HK$13.9 billion for last year – with the rate of return of 0.3 percent – the lowest since 2015.

Investment in stocks ended up HK$59 billion in the red amid volatility in global markets. But the loss was largely offset by a HK$57.4 billion gain in bonds.

A strong US dollar last year also hurt the fund by HK$9 billion due to a foreign exchange loss. But other investments such as real estate contributed a gain of HK$24.5 billion.

Last year's gain largely came from the fund's long term growth portfolio which invests in real estate and private projects. The portfolio was created in 2009 to steer the fund away from any volatility in financial markets.

The chief executive of the Monetary Authority, Norman Chan, who is in charge of the fund, said the investment outlook for this year is highly uncertain due to the tariff war between China and the US, Brexit, and possible future policy shifts by Washington.

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