HONG KONG MONETARY AUTHORITY Annual Report 1996
PERFORMANCE IN 1996
MANAGEMENT OF THE EXCHANGE FUND
EXPERTISE
About three quarters of the assets of the Exchange Fund are managed internally, with the remaining being managed by external managers. The HKMA continues to strengthen both the depth and breadth of its internal management and to upgrade the utilisation of its external managers.
The internal management of the Fund is conducted by HKMA's Direct Investment Division, which invests the funds under its management in three separate portfolios: a Hedging Portfolio comprising of assets as a hedge against the interest-bearing liabilities of the Fund; a Liquidity Portfolio of reserves to meet market operational needs when needed; and an Investment Portfolio engaged in longer-term investments to preserve the value of the Fund for the future benefit of the people of Hong Kong.