The HKMA manages the Exchange Fund in distinct portfolios in order to meet the specific statutory purposes of the Exchange Fund. Broadly speaking, the Exchange Fund has two major portfolios – the Backing Portfolio and the Investment Portfolio.
With the aim of diversifying risks and enhancing medium-to-long term returns, the Exchange Fund started investing in private equity and real estate under the Long-Term Growth Portfolio (LTGP) in 2009 in a prudent and incremental manner. The target asset allocation of LTGP is determined concurrently with that of other asset classes, subject to prudent risk management principles.
The Strategic Portfolio was established in 2007 to hold shares in Hong Kong Exchanges and Clearing Limited acquired by the Government for the account of the Exchange Fund for strategic purposes. Because of the unique nature of this Portfolio, it is not included in the assessment of the investment performance of the Exchange Fund.
The sizes of major assets and liabilities of the Exchange Fund at end-2021 are: