Exchange Fund investment income hit $75.9b in 2013

Investment return came in at 2.7%.

According to a report, the Exchange Fund recorded an investment income of $75.9 billion last year, and the net investment income was $71.2 billion after deducting interest.

Announcing the fund’s results for 2013 today, the Monetary Authority said its investment return is 2.7%.

Fee payments to fiscal reserves amounted to $36.8 billion, while fee payments to placements by Government funds and statutory bodies amounted to $9.3 billion. The accumulated surplus increased $13.4 billion.

The fund’s total assets grew $248.9 billion to $3.03 trillion at the end of 2013. The rise was mainly attributable to increases in the Certificates of Indebtedness, bank borrowings and placements received from Fiscal Reserves, Government funds and statutory bodies.

The authority’s Chief Executive Norman Chan said he expected that global financial markets will continue to be subject to many uncertainties in 2014, including the pace and the scale of the US Federal Reserve's exit from Quantitative Easing and the consequential reactions of the US and global interest rates.

“There remain uncertainties about the sustainability of the economic recovery in the US and Europe, as well as possible outflow of funds from emerging markets, like what we saw in May and June last year,” he said.

“The HKMA will continue to manage the Exchange Fund prudently, strengthen the defensive position of our US bond holdings, and step up our investment diversification with a view to enhancing medium- to long-term returns for the Exchange Fund.”