HKMA Exchange Fund

UAO Registry · Top 100 · Rank 15 · Central-bank reserves / currency board · Hong Kong

Last researched: Sunday 6 September 2026 (ET). Corrections: info@universalassetowners.com

• Executive brief
• Speakable summary
• Mandate & ownership
• Statutory purposes & crisis uses
• Linked Exchange Rate System
• Scale & portfolio
• Abridged balance sheet (end-2025)
• Currency mix & multi-year returns
• Portfolio architecture
• Long-Term Growth Portfolio
• External managers & EFIO
• Placements & Future Fund
• Governance & leadership
• EFAC & sub-committees
• Chief Executive’s Committee depth
• Investment philosophy & process
• Risk management & compliance
• Responsible investment / climate
• Performance & reporting
• 2025 results depth
• Transparency stack
• Controversies & debates
• Timeline
• Annotated history depth
• Outbound reports checklist
• Reading notes vs peers
• Research method
• Official phrasing bank
• Data caveats
• Deliberate omissions
• Related UAO links
• FAQ
• Sources & further reading
• Completeness note

Executive brief: what is the HKMA Exchange Fund?

The Exchange Fund is Hong Kong’s official reserves fund, established by the Currency Ordinance of 1935 (later the Exchange Fund Ordinance) and managed by the Hong Kong Monetary Authority (HKMA) under delegated authority from the Financial Secretary. Its primary statutory purpose is to affect the exchange value of the Hong Kong dollar; since the Exchange Fund (Amendment) Ordinance 1992 it also supports the stability and integrity of Hong Kong’s monetary and financial systems. It underpins the Linked Exchange Rate System (Currency Board) and is not a classic sovereign wealth fund.

Official end-2025 scale (HKD as published): the 28 January 2026 Exchange Fund Position press release and unaudited Abridged Balance Sheet report total assets of HK$4,151.4 billion at 31 December 2025 (HK$4,081.0 billion at end-2024). The Annual Report 2025 Reserves Management chapter reports HK$4,161.2 billion total assets at year-end in the currency-mix table. Audited 2025 investment income was HK$337.4 billion with an 8.0% investment return (Investment Portfolio 12.4%; Backing Portfolio 5.2%). Prefer these HKD figures over any third-party USD conversion.

Leadership for researchers (live Chief Executive’s Committee; organisation chart last revision 17 August 2026): Chief Executive Eddie Yue (from 1 October 2019); Deputy Chief Executives Arthur Yuen (banking policy, supervision, conduct and enforcement; appointment extended two years effective August 2026), Howard Lee (reserves management, financial infrastructure and fintech), and Darryl Chan (External, Monetary Management and Research).

Why researchers care: the Exchange Fund is the last line of defence for Hong Kong’s Currency Board, combines a highly liquid Backing Portfolio with a multi-asset Investment Portfolio and a private-markets Long-Term Growth Portfolio, publishes monthly abridged balance sheets and semi-annual investment results, and discloses audited financial statements in the HKMA Annual Report. Related UAO hubs: Registry, Top 100, peers NBIM, GPIF, GIC, CIC.

Mandate & ownership

Legal owner / controller: the Exchange Fund is established under the Exchange Fund Ordinance and is under the control of the Financial Secretary of the Hong Kong Special Administrative Region. The Monetary Authority (the HKMA’s Chief Executive) is responsible to the Financial Secretary for the use and investment management of the Fund under delegated authority.

What the mandate is: primarily to affect, directly or indirectly, the exchange value of the currency of Hong Kong; secondarily (1992 amendment) to maintain the stability and integrity of Hong Kong’s monetary and financial systems with a view to maintaining Hong Kong as an international financial centre. Investment objectives layered on that statute prioritise capital preservation, full US-dollar backing of the Monetary Base, liquidity for stability operations, and only then long-term purchasing-power preservation.

What the mandate is not: a classic savings-style sovereign wealth fund with a pure intergenerational excess-returns brief unconstrained by Currency Board backing. Fiscal Reserves and other public placements sit with the Fund under fee arrangements, but they do not redefine the Fund’s primary statutory purpose.

HKMA institutional frame (Annual Report 2025 “HKMA at a Glance”): the HKMA is the government authority responsible for maintaining monetary and banking stability, with four key functions — currency stability within the Linked Exchange Rate System; financial-system stability including banking; Hong Kong’s IFC status and financial infrastructure; and managing the Exchange Fund. It is an integral part of the HKSAR Government but operates with a high degree of autonomy, accountability and transparency.

Statutory purposes & “last line of defence” uses

Opened HKMA statutory-purposes page and Annual Report language describe both the Ordinance purposes and historical crisis uses of the Fund. Fold only attributable official examples:

The Exchange Fund's statutory purpose, as defined in the Exchange Fund Ordinance, is primarily to affect, either directly or indirectly, the exchange value of the currency of Hong Kong. Its functions were extended with the enactment of the Exchange Fund (Amendment) Ordinance 1992 by introducing a secondary and subsidiary purpose of maintaining the stability and integrity of Hong Kong's monetary and financial systems, with a view to maintaining Hong Kong as an international financial centre.

Underpinned by such purpose, the Exchange Fund has played a crucial role in helping Hong Kong weather various banking and financial crises in the past few decades. The Last Line of Defence in Times of Crises. In the 1980s when several banks were on the brink of closure, the Government used the Exchange Fund to take over or provide guarantee for the banks.

During the stock market crash in 1987, the Government used the Exchange Fund to support the futures market to prevent its collapse. In 1991, the Exchange Fund was used to provide liquidity support to a few banks that were experiencing runs. In August 1998, the Government used the Exchange Fund to counter an attack on Hong Kong currency and stock markets by some international financial market predators.

In the wake of the global financial crisis in October 2008, the Exchange Fund provided a full guarantee for all deposits in Hong Kong as well as liquidity and capital support to banks to maintain market and public confidence in Hong Kong's financial systems. Taking into full account of the Exchange Fund's statutory purposes, the Financial Secretary, on advice of the Exchange Fund Advisory Committee (EFAC), has set the following investment objectives for the Exchange Fund: (1) To preserve capital; (2) To ensure the entire Monetary Base, at all times, is fully backed by highly liquid US dollar-denominated assets; (3) To ensure sufficient liquidity is available for the purposes of maintaining monetary and financial stability; (4) Subject to (a)–(c), to achieve an investment return that will help preserve the Exchange Fund's long-term purchasing power.

Source fold: hkma.gov.hk Exchange Fund’s Statutory Purposes and Investment Objectives (last revision 26 August 2019) + AR 2025 Reserves Management. Verify against the live page before citing beyond this profile.

Linked Exchange Rate System & Currency Board

The Exchange Fund’s Backing Portfolio exists to make the Currency Board operational. Official LERS summary:

The Linked Exchange Rate System (LERS) has been implemented in Hong Kong since 17 October 1983. Through a rigorous, robust and transparent Currency Board system, the LERS ensures that the Hong Kong dollar exchange rate remains stable within a band of HK$7.75-7.85 to one US dollar.

The LERS is the cornerstone of Hong Kong's monetary and financial stability. It has weathered many economic cycles and has proved highly resilient in the face of regional and global financial crises over the years. Hong Kong's Linked Exchange Rate System is a Currency Board system.

The HKMA has been disclosing the forecast change in the Aggregate Balance attributable to the HKMA's foreign exchange transactions on its Reuters page on a real time basis since June 1998. This measure enables market participants to anticipate changes in liquidity conditions in the interbank market and facilitates a more efficient adjustment in the interbank interest rates.

In addition, details of the entire Monetary Base and a breakdown of its components are published on the Reuters' HKMA page every day. Information on the Monetary Base and Interbank Liquidity are also released daily on the HKMA website.

Source fold: hkma.gov.hk Linked Exchange Rate System page. Verify against the live page before citing beyond this profile.

Scale & portfolio (dated official HKD)

Researchers should hold two closely related end-2025 totals side by side rather than collapsing them into a single invented figure:

Asset mix on the unaudited abridged sheet at 31 December 2025 (HK$ billion): deposits 429.0; debt securities 2,856.0; Hong Kong equities 171.1; other equities 424.9; other assets 270.4 (including fund injection to investment-holding subsidiaries at carrying amount HK$193.0 billion).

Major liabilities (same sheet): Certificates of Indebtedness 635.1; government-issued currency notes & coins 13.0; balance of the banking system 57.0; Exchange Fund Bills and Notes issued 1,335.1; placements by banks and other financial institutions 71.7; placements by Fiscal Reserves 688.9; placements by HKSAR Government funds and statutory bodies 273.8; placements by subsidiaries 67.3; other liabilities 72.3.

Abridged balance sheet narrative (January 2026 release)

The January 2026 results release pairs income components with the abridged sheet. Folded official narrative:

Hong Kong Monetary Authority - Exchange Fund Position at end-December 2025 Hong Kong Monetary Authority 香港金融管理局 Contact Us 繁 简 A A A Keyword Search Select Category The whole of the HKMA website Press Releases Speeches inSight R&M Column (Chinese only) Data & Statistics Publications Research Legislative Council Issues Supervisory Policy Manual Guidelines & Circulars Guide to Authorization Consultations Show All Options Modification Time Modification Time Anytime Within The Past Date Range Done Within The Past 24 hours Week Month Year Done From Done a To Done News and Media Press Releases R & M Column Videos Speeches Forthcoming Events inSight Photo Gallery Smart Consumers Overview e-Banking Personal Digital Keys Internet Banking ATMs Payment and Transfer Faster Payment System (FPS) e-CNY e-Payment and Transfer e-Wallets and Prepaid Cards Credit Cards Personal cross-boundary remittance between Hong Kong and the Chinese Mainland Payment Connect Loans Personal Credit Mortgages Premium Financing General Banking Services Account Opening and Maintenance Autopay Services Investment Services Deposits Beware of Fraudsters!

Money Safe Don’t Lend/Sell Your Account Notes and Coins 2018 Series Hong Kong Banknotes Coin Cart Schedule Retirement Planning Practical Information Barrier-free Bank Branches and ATMs Hotlines of Banks, Stored Value Facility Licensees & Licensed Stablecoin Issuers Complaints about Banks, Stored Value Facility Licensees & Licensed Stablecoin Issuers Registers and Lists Public Education Videos Public Education Events FAQs Information in Other Languages Data, Publications and Research Data & Statistics Daily Monetary Statistics Monthly Statistical Bulletin Economic & Financial Data for Hong Kong CMU Bond Price Bulletin Legislative Council Issues Publications Annual Report Sustainability Report Half-Yearly Monetary & Financial Stability Report Bulletin Guide to Hong Kong Monetary, Banking and Financial Terms Research Research Memorandums External Publications Hong Kong Institute for Monetary and Financial Research Other Research Papers HKMA's Open Application Programming Interface (API) Regulatory Resources Registers and Lists Register of AIs & LROs Register of Securities Staff of AIs Register of SVF Licensees List of AI-related Trustees Register of Licensed Stablecoin Issuers Authorization, Licensing, Designation and Approval Regulatory Documents Banking Regulatory Document Repository Stablecoin Issuers Stored Value Facilities and Retail Payment Systems Key Functions Money Linked Exchange Rate System Liquidity Facilities Hong Kong Currency Exchange Fund – Reserves Management History Exchange Fund’s Statutory Purposes and Investment Objectives Investment Management Investment Performance Risk Management Responsible Investment Exchange Fund Statistics and Publications Banking Banking Regulatory and Supervisory Regime Banking Legislation, Policies and Standards Implementation Banking Conduct and Enforcement Anti-Money Laundering and Counter-Financing of Terrorism Resolution Regime Smart Banking Fintech Knowledge Hub Green and Sustainable Banking Events International Financial Centre Hong Kong as an International Financial Centre Fintech Bond Market Development Financial Market Infrastructure Stored Value Facilities and Retail Payment Systems Regulatory Regime for Stablecoin Issuers Soft Infrastructure International & Regional Financial Co-operation Green and Sustainable Finance HKMA Infrastructure Financing Facilitation Office Cross-boundary Wealth Management Connect Scheme in the Guangdong-Hong Kong-Macao Greater Bay Area Global Financial Leaders’ Investment Summit HKMA – BIS High-Level Conference About Us The HKMA Governance Structure Advisory Committees The Chief Executive’s Committee Organisation Chart Internal Audit Sustainable HKMA Tender Invitations The HKMA Information Centre Exhibition Area Library General Information Guided Tours Souvenirs Related Organisations and Links HKMA-related Organisations and Links HKSAR Government & Related Organisations Central Banks Multilateral Organisations Others Join Us Why the HKMA?

Current Vacancies Opportunities for Students and Graduates to Join the HKMA News and Media Press Releases Speeches inSight R & M Column Forthcoming Events Photo Gallery Videos Smart Consumers Overview e-Banking Personal Digital Keys Internet Banking ATMs Payment and Transfer Faster Payment System (FPS) e-CNY e-Payment and Transfer e-Wallets and Prepaid Cards Credit Cards Personal cross-boundary remittance between Hong Kong and the Chinese Mainland Payment Connect Loans Personal Credit Mortgages Premium Financing General Banking Services Account Opening and Maintenance Autopay Services Investment Services Deposits Beware of Fraudsters!

Money Safe Don’t Lend/Sell Your Account Notes and Coins 2018 Series Hong Kong Banknotes Coin Cart Schedule Retirement Planning Practical Information Barrier-free Bank Branches and ATMs Hotlines of Banks, Stored Value Facility Licensees & Licensed Stablecoin Issuers Complaints about Banks, Stored Value Facility Licensees & Licensed Stablecoin Issuers Registers and Lists Public Education Videos Public Education Events FAQs Information in Other Languages Data, Publications and Research Data & Statistics Daily Monetary Statistics Monthly Statistical Bulletin Economic & Financial Data for Hong Kong CMU Bond Price Bulletin Publications Annual Report Sustainability Report Half-Yearly Monetary & Financial Stability Report Bulletin Research Research Memorandums External Publications Hong Kong Institute for Monetary and Financial Research Other Research Papers Legislative Council Issues Guide to Hong Kong Monetary, Banking and Financial Terms HKMA's Open Application Programming Interface (API) Regulatory Resources Registers and Lists Register of AIs & LROs Register of Securities Staff of AIs Register of SVF Licensees List of AI-related Trustees Register of Licensed Stablecoin Issuers Authorization, Licensing, Designation and Approval Regulatory Documents Banking Regulatory Document Repository Stablecoin Issuers Stored Value Facilities and Retail Payment Systems Key Functions Money Linked Exchange Rate System Liquidity Facilities Hong Kong Currency Banking Banking Regulatory and Supervisory Regime Banking Legislation, Policies and Standards Implementation Banking Conduct and Enforcement Anti-Money Laundering and Counter-Financing of Terrorism Resolution Regime Smart Banking Fintech Knowledge Hub Green and Sustainable Banking Events International Financial Centre Hong Kong as an International Financial Centre Fintech Bond Market Development Financial Market Infrastructure Stored Value Facilities and Retail Payment Systems Regulatory Regime for Stablecoin Issuers Soft Infrastructure International & Regional Financial Co-operation Green and Sustainable Finance HKMA Infrastructure Financing Facilitation Office Cross-boundary Wealth Management Connect Scheme in the Guangdong-Hong Kong-Macao Greater Bay Area Global Financial Leaders’ Investment Summit HKMA – BIS High-Level Conference Exchange Fund – Reserves Management History Exchange Fund’s Statutory Purposes and Investment Objectives Investment Management Investment Performance Risk Management Responsible Investment Exchange Fund Statistics and Publications About Us The HKMA Governance Structure Advisory Committees The Chief Executive’s Committee Organisation Chart Internal Audit Sustainable HKMA The HKMA Information Centre Exhibition Area Library General Information Guided Tours Souvenirs Join Us Why the HKMA?

Current Vacancies Opportunities for Students and Graduates to Join the HKMA Tender Invitations Related Organisations and Links HKMA-related Organisations and Links HKSAR Government & Related Organisations Central Banks Multilateral Organisations Others 繁 简 Font Size A A A Print Contact Us Home / News and Media / Press Releases Exchange Fund Position at end-December 2025 Press Releases 28 Jan 2026 Exchange Fund Position at end-December 2025 The Hong Kong Monetary Authority (HKMA) today (28 January) published the unaudited financial position of the Exchange Fund at end-December 2025.

The Exchange Fund recorded an investment income of HK$331.0 billion in 2025. The main components were: gains on bonds of HK$142.2 billion; gains on Hong Kong equities of HK$33.9 billion; gains on other equities of HK$74.1 billion; positive currency translation effect of HK$38.4 billion on non-Hong Kong dollar assets ( Note 1 ); and gains on other investments of HK$42.4 billion ( Note 2 ).

Fees on placements by the Fiscal Reserves and placements by HKSAR Government funds and statutory bodies were HK$16.5 billion ( Note 3 ) and HK$14.7 billion respectively in 2025, with the rate of fee payment at 4.4% for 2025. The Abridged Balance Sheet shows that the total assets of the Exchange Fund increased by HK$70.4 billion, from HK$4,081.0 billion at the end of 2024 to HK$4,151.4 billion at the end of 2025.

Accumulated surplus stood at HK$936.1 billion at end-December 2025. The Exchange Fund recorded an investment return of 8.0% in 2025 ( Note 4 ). Specifically, the Investment Portfolio achieved a rate of return of 12.4% and the Backing Portfolio gained 5.2%. The Long-Term Growth Portfolio (LTGP) recorded an annualised internal rate of return of 11.2% since its inception in 2009 up to the end of September 2025.

Commenting on the performance of the Exchange Fund in 2025, Mr Eddie Yue, Chief Executive of the HKMA, said, “The global financial markets experienced significant volatility in the first half of 2025 due to factors such as trade conflicts and geopolitical tensions. In particular, following the announcement of a series of tariff measures by the US Government in early April, global equity and bond markets fell sharply.

As we entered the second half of the year, the investment environment improved notably, bolstered by the smaller-than-expected impact from trade conflicts as well as the swift advancement of artificial intelligence technology which attracted investment flows. Policy rate cuts by major central banks during the year also helped boost market sentiment.

Overall, the global financial markets showed strong resilience in 2025. Major stock markets saw broad-based gains, with many of them setting record highs. The S&P 500 finished the year up 16%. Benefitting from capital inflows into the Hong Kong stock market, the Hang Seng Index rose by 28% in 2025.

The US Treasuries also performed decently on the back of the US Federal Reserve’s rate cuts. On foreign exchange, the US dollar depreciated by approximately 9% against other major currencies. Against this backdrop, the Exchange Fund’s investment income in 2025 was a record high.

Its bond and equity holdings, and the LTGP all achieved positive returns. The Exchange Fund also registered a positive currency translation effect on its non-Hong Kong dollar assets due to the weakening of the US dollar. It is exceptional for all main components of the Exchange Fund to record positive returns in a single year.

This has occurred only two times over the past 15 years in 2017 and 2020. In addition, the investment of the Exchange Fund entails costs and expenses, such as fees on placements by the Fiscal Reserves and by the HKSAR Government funds and statutory bodies, as well as interest payment on Exchange Fund Bills and Notes and other expenses.” Mr Yue said, “The exceptional confluence of multiple favourable factors in the global financial markets in 2025 may not last for a long time.

Source fold: HKMA PR 28 Jan 2026 Exchange Fund Position + Annex PDF 20260128e3a4. Verify against the live page before citing beyond this profile.

Currency mix & multi-year returns

Annual Report 2025 Table 3 — currency mix of Exchange Fund assets on 31 December 2025 (including forward transactions): US dollar HK$3,308,050 million (79.5%); Hong Kong dollar HK$241,935 million (5.8%); others HK$611,196 million (14.7%), consisting mainly of euro, renminbi, pound sterling and yen; total HK$4,161,181 million.

Table 2 — investment return of the Exchange Fund in Hong Kong dollar terms (excludes Strategic Portfolio; averages annually compounded): 2025 8.0%; 3-year average (2023–2025) 6.2%; 5-year average (2021–2025) 3.6%; 10-year average (2016–2025) 3.9%; average since 1994 4.6%. The Investment Performance page states the compounded annual investment return since 1994 (4.6%) is higher than the compounded annual Hong Kong composite CPI (~2.0%) for the same period.

Market backdrop cited in Reserves Management for 2025 (index price changes): S&P 500 +16.4%; Hang Seng Index +27.8%; MSCI Emerging Markets +30.6%; relevant US Government Bond (1–30 years) Index +6.2%; euro +13.4% vs USD; USD depreciation against major currencies supported a positive currency translation effect on non-HKD assets.

Portfolio architecture (BP, IP, LTGP, Strategic)

Reserves Management chapter and Investment Management page describe portfolio segregation:

Reserves Management The Exchange Fund Figure 1 Portfolio segregation of the Exchange Fund Under the Exchange Fund Ordinance, the Exchange Fund’s primary objective is to affect, either directly or indirectly, Backing Portfolio Investment Portfolio the exchange value of the currency of Hong Kong.

Consists of highly liquid Consists of public market US dollar-denominated assets (including developed and The Fund may also be used to maintain the stability and of high credit quality emerging market) assets integrity of Hong Kong’s monetary and financial systems with Exchange a view to maintaining Hong Kong as an international financial Fund centre.

The HKMA, under the delegated authority of the Financial Secretary and within the terms of the delegation, Long-Term Strategic Portfolio Growth Portfolio Consists entirely of shares in is responsible to the Financial Secretary for the use and Consists of private equity Hong Kong Exchanges and Clearing Limited for strategic purposes investment management of the Exchange Fund.

and real assets Management of the Exchange Fund Broadly speaking, the Exchange Fund has two major portfolios: the Backing Portfolio (BP) and the Investment Investment objectives and portfolio Portfolio (IP). The BP holds highly liquid US dollar assets structure to provide full backing to the Monetary Base, as required The Exchange Fund Advisory Committee (EFAC) has set the under the Currency Board arrangements.

The IP invests following investment objectives for the Exchange Fund: primarily in the bond and equity markets of the member (i) To preserve capital; economies of the Organisation for Economic Co-operation and Development, with a view to preserving the value and (ii) To ensure that the entire Monetary Base, at all times, long-term purchasing power of its assets.

is fully backed by highly liquid US dollar-denominated assets; To better manage risks and enhance returns in the medium (iii) To ensure that sufficient liquidity is available for the and long term, the HKMA diversifies part of the Exchange purposes of maintaining monetary and financial Fund’s investments in a prudent and incremental manner, stability; and including in emerging market and Mainland bonds and (iv) Subject to (i)–(iii), to achieve an investment return that equities, private equity and real assets.

Emerging market will help preserve the long-term purchasing power of and Mainland bonds and equities are held under the IP, while the Exchange Fund. private equity and real asset investments are held under the Long-Term Growth Portfolio (LTGP). These objectives take full account of the statutory purposes of the Exchange Fund, and are incorporated into the portfolio The Strategic Portfolio, established in 2007, holds shares in structure and the target asset mix of the Fund (Figure 1).

Hong Kong Exchanges and Clearing Limited that have been acquired by the Government for the account of the Exchange Fund for strategic purposes. Due to its unique nature, the Strategic Portfolio is not included in the assessment of the Fund’s investment performance. H O N G KO N G M O N E TA RY AU T H O R I T Y 151 Reserves Management Placements with the Exchange Fund Use of external managers The Exchange Fund, from time to time, accepts placements The HKMA also employs external fund managers to manage by the Fiscal Reserves, Government funds and statutory about 29% of the Exchange Fund’s assets, including all of its bodies.

The interest rate is generally linked to the listed equity portfolios and other specialised asset classes. A major exception is the Future The purpose of engaging external managers is to tap the Fund2, which links its interest rate to the return of both the IP best investment expertise available in the market to realise and the LTGP in accordance with the portfolio mix.

sustainable returns, while also drawing on diverse and The target portfolio mix of the Future Fund between the IP complementary investment styles and taking advantage and the LTGP was 45:55 for 2025. of external market insights and technical expertise in investment. The investment process Expenditure relating to the use of external managers includes The investment process of the Exchange Fund is underpinned fund management and custodian fees, transaction costs, and by decisions on strategic asset allocation and tactical asset withholding and other taxes.

The expenditure is determined allocation. Strategic asset allocation, reflected in the primarily by market factors and may fluctuate from year to investment benchmark, represents long-term asset allocation year. based on the investment objectives of the Exchange Fund. Guided by the strategic allocation, tactical decisions are Risk management and compliance made with a view to achieving an excess return over the benchmark.

This means the actual allocation is often The investment process of the Exchange Fund is also different from the benchmark (or strategic) allocation, and the underpinned by a robust risk management and compliance differences in allocations are “tactical deviations”. The HKMA sets stringent controls The benchmark and tracking error3 limit are determined by and investment guidelines for its internally and externally the Financial Secretary in consultation with EFAC.

Three lines of defence are in place for Tactical decisions and allowable ranges for tactical deviations effective risk management and governance of investment are made and set by the HKMA under delegated authority. The HKMA regularly monitors key risk types, Within the ranges allowed for tactical deviations, portfolio including credit, market, liquidity and operational risks.

managers may assume positions to take advantage of short-term market movements. Responsible investment The HKMA believes that placing an appropriate emphasis on Investment management responsible investment and sustainable long-term economic Direct investment performance can help better achieve the investment objectives of the Exchange Fund, as well as reduce risks The HKMA’s Exchange Fund Investment Office houses the associated with environmental, social and governance (ESG)- Exchange Fund’s investment and related risk management related matters of its underlying investments.

About 71% of the investments of the Exchange responsible investment practices, we have integrated ESG Fund, comprising the entire BP and part of the IP, are factors into the investment processes of the Exchange Fund, managed in-house. These include portfolios investing in with the guiding principle that priority will generally be given global fixed-income markets and various derivative overlay to ESG investments if their long-term risk-adjusted returns portfolios implementing macro risk management strategies are comparable with other investments.

For more details for the Fund. about our responsible investment work, see the Responsible Investment chapter of our Sustainability Report 2025. 1 The rate is the average annual investment return of the IP for the past six years, or the average annual yield of three-year Government Bond for the previous year, subject to a minimum of 0% (whichever is higher).

Source fold: AR 2025 Reserves Management chapter + hkma.gov.hk Investment Management. Verify against the live page before citing beyond this profile.

Long-Term Growth Portfolio depth

The LTGP holds private equity and real asset investments. At end-2025 the market value of LTGP investments totalled HK$578.4 billion (private equity HK$417.1 billion; real assets HK$161.3 billion), with outstanding investment commitments of HK$296.4 billion.

Annual Report wording: diversification into emerging-market and Mainland bonds and equities, private equity and real assets has proceeded “in a prudent and incremental manner.” Emerging-market and Mainland bonds and equities sit under the Investment Portfolio; private equity and real assets sit under the LTGP.

Risk page: LTGP risks are managed at aggregate level via asset-class approval, allocation limits and general-partner exposure limits; Risk and Compliance performs independent business-risk assessment of proposals and ongoing post-investment monitoring (capital calls, concentration, agreement compliance).

Performance caveat: the January 2026 press release notes that “other investments” valuation changes for investment-holding subsidiaries reflected valuations at end-September 2025, with October–December changes not yet available in that unaudited release — another reason to prefer the audited Annual Report income figure when the two differ.

External managers & Exchange Fund Investment Office

About 71% of Exchange Fund investments — the entire Backing Portfolio and part of the Investment Portfolio — are managed in-house by the HKMA’s Exchange Fund Investment Office (EFIO), including global fixed-income portfolios and derivative overlay portfolios for macro risk management. About 29% of assets are managed by external fund managers, including all listed equity portfolios and other specialised asset classes.

Official purpose of external managers: tap best available market expertise for sustainable returns, draw on diverse and complementary investment styles, and use external market insights and technical expertise. Related expenditure includes fund-management and custodian fees, transaction costs, and withholding and other taxes, and may fluctuate with market factors.

EFIO was established on 1 August 2018 as an integral part of the HKMA to house investment and related risk-management functions as the Fund’s scale, diversity and complexity expanded (History page). Live Chief Executive’s Committee lists Albert Goh as Executive Director / Deputy Chief Executive Officer (EFIO), responsible for overall investment management of the Exchange Fund and reporting to the CEO of EFIO; Alan Au serves as Executive Director (Risk and Compliance) and Chief Risk Officer (EFIO).

Placements by Fiscal Reserves, Government funds & the Future Fund

The Exchange Fund accepts placements by the Fiscal Reserves, Government funds and statutory bodies. Interest is generally linked to Investment Portfolio performance. Per AR Reserves Management footnote, the fee rate is the average annual investment return of the IP for the past six years, or the average annual yield of three-year Government Bond for the previous year, subject to a minimum of 0% (whichever is higher).

The Future Fund, established by the Government in 2016 to secure higher investment returns for the Fiscal Reserves for future needs, links interest to both IP and LTGP returns per portfolio mix. Target IP:LTGP mix for the Future Fund was 45:55 for 2025. History page: placements were for a ten-year period subsequently extended to 31 December 2030; initial endowment from the Land Fund balance plus periodic General Revenue top-ups as directed by the Financial Secretary.

2025 fees (PR): HK$16.5 billion on Fiscal Reserves placements and HK$14.7 billion on HKSAR Government funds and statutory bodies, at a 4.4% fee rate for 2025. The 2025 Future Fund fee payment is disclosed when the composite rate is available. Abridged sheet placements by Fiscal Reserves stood at HK$688.9 billion at end-2025 (including Future Fund HK$235.1 billion); placements by Government funds and statutory bodies HK$273.8 billion.

Governance & leadership

Day-to-day leadership of the HKMA (and therefore of Exchange Fund management under delegation) sits with Chief Executive Eddie Yue, JP, appointed from 1 October 2019. He joined the HKMA at its 1993 establishment, became Executive Director in 2001 and Deputy Chief Executive in 2007; as DCE he steered reserves management, research, external affairs and market development and was involved in enhancing the Linked Exchange Rate System.

Deputy Chief Executives with verified UAO person SSR pages: Arthur Yuen, JP — full range of banking policy, supervision, conduct and enforcement (DCE from 1 January 2010; Financial Secretary approved a two-year extension effective August 2026 on Governance Sub-Committee advice, PR 9 January 2026); Howard Lee, JP — reserves management, financial infrastructure and fintech (DCE from 1 January 2018; also Executive Director of the Hong Kong Mortgage Corporation Limited); Darryl Chan, JP — External, Monetary Management and Research (DCE from 1 November 2022).

Accountability path: HKMA is accountable to the people of Hong Kong through the Financial Secretary and through laws passed by the Legislative Council setting out the Monetary Authority’s powers and responsibilities. In control of the Exchange Fund, the Financial Secretary is advised by EFAC.

Exchange Fund Advisory Committee & sub-committees

Annual Report 2025 Advisory Committees chapter (EFAC as at 31 March 2026) and governance text:

etary is Financial Secretary through EFAC. The Committee held five advised by the Exchange Fund Advisory Committee (EFAC). meetings in 2025 to discuss a full range of issues relating to EFAC is established under section 3(1) of the Exchange Fund the work of the HKMA, most of which had been previously Ordinance, which requires the Financial Secretary to consult discussed by the relevant Sub-Committees.

the Committee in his exercise of control of the Exchange Fund. The Financial Secretary is ex officio Chairman of Brief biographies of EFAC Members and the Code of Conduct for EFAC. Other members, including the Monetary Authority, are EFAC Members can be found on the HKMA website.

A Register appointed in a personal capacity by the Financial Secretary of Members’ Interests, which contains the declarations of interests under the delegated authority of the Chief Executive of the by Members, is available for public inspection during 10:00 a.m. Members of EFAC are appointed for the expertise to 6:00 p.m.

Monday to Friday (except public holidays) at the and experience that they can bring to the Committee. Such expertise and experience include knowledge of monetary, financial and economic affairs and of investment issues, as well as of accounting, management, business and legal matters.

The terms of reference for EFAC and its Sub-Committees are available on the HKMA website 44 A N N UA L R E P O R T 2025 Advisory Committees Chairman 31 March 2026 The Honourable Paul CHAN Mo-po, GBM, GBS, MH, JP The Financial Secretary Members Mr Eddie YUE, JP Mr Benjamin HUNG Pi-cheng, BBS, JP The Monetary Authority President, International Standard Chartered Bank Mr Nicky LO Kar-chun, SBS, JP Mr Stephen YIU Kin-wah, JP Chairman Insurance Authority Mr SUN Yu, JP Professor TAM Kar-yan, MH, JP Vice Chairman and Chief Executive Vice President (Administration and Business) and Chair Professor Bank of China (Hong Kong) Limited The Hong Kong University of Science and Technology H O N G KO N G M O N E TA RY AU T H O R I T Y 45 Advisory Committees Dr the Honourable Victor FUNG Kwok-king, GBM, GBS Mr David LIAO Yi-chien, JP Chairman Co-Chief Executive Fung Investments Asia and Middle East HSBC Holdings plc Mr Michael WONG Yick-kam, SBS, MH, JP Mr Jack CHAN Hoi, JP Chairman, EY China Regional Managing Partner, EY Greater China Mr Dennis CHOW Chi-in Dr James C LIN Chair, Deloitte Asia Pacific Senior Partner Deputy Chair, Deloitte Global Davis Polk & Wardwell Mr Johnny CHAN Kok-chung Mr Clement CHAN Kam-wing, BBS, MH, JP President Senior Advisor to the Board Hong Kong Venture Capital and Private Equity Association BDO Limited (Membership from 23 September 2025) (Membership from 10 October 2025) 46 A N N UA L R E P O R T 2025 Advisory Committees Ms Ivy CHEUNG Wing-han Mr Peter LIU Sin-shing Vice Chairman, KPMG China Senior Managing Director Senior Partner, KPMG in Hong Kong Asianet Consultants (Membership from 10 October 2025) (Membership from 10 October 2025) Dr Kelvin WONG Tin-yau, SBS, JP Mr Tim LUI Tim-leung, GBS, JP Chairman (Membership until 30 June 2025) Securities and Futures Commission (Membership from 10 October 2025) Mrs Ayesha MACPHERSON LAU, BBS, JP Professor Raymund CHAO Pak-ki Chairman (Membership until 28 October 2025) Mandatory Provident Fund Schemes Authority (Membership until 30 September 2025) Secretary Ms Sarah KWOK H O N G KO N G M O N E TA RY AU T H O R I T Y 47 Advisory Committees The Exchange Fund Advisory Committee Sub-Committee Structure Governance Sub-Committee Oversight Audit Sub-Committee Exchange Fund Advisory Committee Currency Board Sub-Committee Investment Sub-Committee Technical Financial Infrastructure and Market Development Sub-Committee 48 A N N UA L R E P O R T 2025 Advisory Committees The Exchange Fund Advisory Committee Governance Sub-Committee The Governance Sub-Committee monitors the performance of the HKMA and makes recommendations to EFAC on remuneration and human resources policies, and on budgetary, administrative and governance issues.

The Sub-Committee met five times in 2025 to consider a range of subjects including the HKMA’s expenditure budget, performance assessment, annual pay review and strategic planning matters. The Sub-Committee also received regular reports on the work of the HKMA. Chairman Mr Nicky LO Kar-chun, SBS, JP Members Mr Stephen YIU Kin-wah, JP Professor TAM Kar-yan, MH, JP Chairman Vice President (Administration and Business) and Chair Professor Insurance Authority The Hong Kong University of Science and Technology Dr the Honourable Victor FUNG Kwok-king, GBM, GBS Mr Michael WONG Yick-kam, SBS, MH, JP Chairman Fung Investments Mr Jack CHAN Hoi, JP Mr Dennis CHOW Chi-in Chairman, EY China Chair, Deloitte Asia Pacific Regional Managing Partner, EY Greater China Deputy Chair, Deloitte Global Dr James C LIN Mr Johnny CHAN Kok-chung Senior Partner President Davis Polk & Wardwell Hong Kong Venture Capital and Private Equity Association (Membership from 23 September 2025) Mr Clement CHAN Kam-wing, BBS, MH, JP Ms Ivy CHEUNG Wing-han Senior Advisor to the Board Vice Chairman, KPMG China BDO Limited Senior Partner, KPMG in Hong Kong (Membership from 10 October 2025) (Membership from 10 October 2025) Mr Peter LIU Sin-shing Dr Kelvin WONG Tin-yau, SBS, JP Senior Managing Director Chairman Asianet Consultants Securities and Futures Commission (Membership from 10 October 2025) (Membership from 10 October 2025) Mr Tim LUI Tim-leung, GBS, JP Mrs Ayesha MACPHERSON LAU, BBS, JP (Membership until 30 June 2025) Chairman Mandatory Provident Fund Schemes Authority (Membership until 30 September 2025) Professor Raymund CHAO Pak-ki (Membership until 28 October 2025) Secretary Ms Sarah KWOK H O N G KO N G M O N E TA RY AU T H O R I T Y 49 Advisory Committees The Exchange Fund Advisory Committee Audit Sub-Committee The Audit Sub-Committe

Source fold: HKMA Annual Report 2025 Advisory Committees + Corporate Governance. Verify against the live page before citing beyond this profile.

Chief Executive’s Committee — executive depth

Live Chief Executive’s Committee biographies (public pages; no private contact details):

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Money Safe Don’t Lend/Sell Your Account Notes and Coins 2018 Series Hong Kong Banknotes Coin Cart Schedule Retirement Planning Practical Information Barrier-free Bank Branches and ATMs Hotlines of Banks, Stored Value Facility Licensees & Licensed Stablecoin Issuers Complaints about Banks, Stored Value Facility Licensees & Licensed Stablecoin Issuers Registers and Lists Public Education Videos Public Education Events FAQs Information in Other Languages Data, Publications and Research Data & Statistics Daily Monetary Statistics Monthly Statistical Bulletin Economic & Financial Data for Hong Kong CMU Bond Price Bulletin Publications Annual Report Sustainability Report Half-Yearly Monetary & Financial Stability Report Bulletin Research Research Memorandums External Publications Hong Kong Institute for Monetary and Financial Research Other Research Papers Legislative Council Issues Guide to Hong Kong Monetary, Banking and Financial Terms HKMA's Open Application Programming Interface (API) Regulatory Resources Registers and Lists Register of AIs & LROs Register of Securities Staff of AIs Register of SVF Licensees List of AI-related Trustees Register of Licensed Stablecoin Issuers Authorization, Licensing, Designation and Approval Regulatory Documents Banking Regulatory Document Repository Stablecoin Issuers Stored Value Facilities and Retail Payment Systems Key Functions Money Linked Exchange Rate System Liquidity Facilities Hong Kong Currency Banking Banking Regulatory and Supervisory Regime Banking Legislation, Policies and Standards Implementation Banking Conduct and Enforcement Anti-Money Laundering and Counter-Financing of Terrorism Resolution Regime Smart Banking Fintech Knowledge Hub Green and Sustainable Banking Events International Financial Centre Hong Kong as an International Financial Centre Fintech Bond Market Development Financial Market Infrastructure Stored Value Facilities and Retail Payment Systems Regulatory Regime for Stablecoin Issuers Soft Infrastructure International & Regional Financial Co-operation Green and Sustainable Finance HKMA Infrastructure Financing Facilitation Office Cross-boundary Wealth Management Connect Scheme in the Guangdong-Hong Kong-Macao Greater Bay Area Global Financial Leaders’ Investment Summit HKMA – BIS High-Level Conference Exchange Fund – Reserves Management History Exchange Fund’s Statutory Purposes and Investment Objectives Investment Management Investment Performance Risk Management Responsible Investment Exchange Fund Statistics and Publications About Us The HKMA Governance Structure Advisory Committees The Chief Executive’s Committee Organisation Chart Internal Audit Sustainable HKMA The HKMA Information Centre Exhibition Area Library General Information Guided Tours Souvenirs Join Us Why the HKMA?

Current Vacancies Opportunities for Students and Graduates to Join the HKMA Tender Invitations Related Organisations and Links HKMA-related Organisations and Links HKSAR Government & Related Organisations Central Banks Multilateral Organisations Others 繁 简 Font Size A A A Print Contact Us Home / About Us / The HKMA / The Chief Executive's Committee The Chief Executive's Committee The role of the Committee is to report to the Chief Executive of the HKMA on the progress of major tasks being undertaken by the various departments of the HKMA and to advise him on policy matters relating to the operations of the HKMA.

Executive Profiles Eddie YUE, JP Chief Executive Biography Print Eddie YUE, JP Chief Executive Mr Eddie Yue was appointed Chief Executive of the Hong Kong Monetary Authority (HKMA) from 1 October 2019. He began his career as an Administrative Officer in the Hong Kong Government in 1986.

He joined the HKMA upon its establishment in 1993 and was promoted to Division Head a year later. He was appointed Executive Director in 2001 and subsequently Deputy Chief Executive in 2007 before taking up his current position. Mr Yue has participated in numerous areas of the HKMA’s work.

During his tenure as Deputy Chief Executive, he steered major policies and initiatives relating to reserves management, research, external affairs and market development. Mr Yue was also actively involved in tackling major financial crises and played an instrumental role in enhancing the Linked Exchange Rate System.

1/17 Arthur YUEN, JP Deputy Chief Executive Biography Print Arthur YUEN, JP Deputy Chief Executive Arthur Yuen is in charge of the full range of banking policy, supervision, conduct, and enforcement issues at the HKMA. He joined the HKMA in 1996 as Head of Administration and has since taken up different responsibilities including research and liaison on China economic and market development issues before being appointed Head of Banking Supervision in 2000.

He took up the position as Executive Director (Banking Development) in July 2004, Executive Director (Banking Supervision) in June 2005 and Executive Director (External) in July 2008. He was appointed to his present position on 1 January 2010. 2/17 Howard LEE, JP Deputy Chief Executive Biography Print Howard LEE, JP Deputy Chief Executive Howard Lee is responsible for reserves management, financial infrastructure and fintech.

He is also an Executive Director of the Hong Kong Mortgage Corporation Limited. He joined the HKMA in 2009 as a Division Head and has worked in various areas including monetary management, financial stability surveillance, corporate services and banking policy. He was appointed as a Deputy Chief Executive on 1 January 2018.

Prior to joining the HKMA, Mr Lee worked in the Hong Kong SAR Government in areas relating to economic development, financial services and other public policies. 3/17 Darryl CHAN, JP Deputy Chief Executive Biography Print Darryl CHAN, JP Deputy Chief Executive Mr Darryl Chan was appointed as Deputy Chief Executive from 1 November 2022, and is responsible for overseeing the work of External, Monetary Management and Research departments.

Mr Chan joined the HKMA as Executive Director (Corporate Services) in February 2013 and took up the post of Executive Director (External) in August 2019. Before joining the HKMA, Mr Chan was an Administrative Officer in the Hong Kong SAR Government and had worked in different policy bureaux and departments on policy formulation and administration.

4/17 Karen KEMP, JP General Counsel Biography Print Karen KEMP, JP General Counsel Karen Kemp has been employed by the HKMA since 1995. She was a Deputy General Counsel in the Office of the General Counsel before her appointment as Executive Director (Banking Policy) in February 2008, and was appointed to her current position in April 2017.

Ms Kemp also served as Deputy Chief Executive Officer of Exchange Fund Investment Limited from 1999 to 2003. Ms Kemp is a solicitor qualified to practise in Hong Kong and in England & Wales. Prior to joining the HKMA, Ms Kemp was employed by Lovells (a firm of solicitors) in London and Hong Kong.

5/17 Carmen CHU, JP Executive Director (Banking Supervision) Biography Print Carmen CHU, JP Executive Director (Banking Supervision) Carmen Chu is responsible for the supervision of authorized institutions to promote banking stability. Carmen joined the HKMA in 1994 as a Manager Trainee, and has taken up different responsibilities in the HKMA, including research and monetary operations.

She was seconded to the World Bank Office in Beijing from 1998 to 1999. Since then she has mainly been involved in international and regional financial cooperation initiatives as well as renminbi business development in Hong Kong. She was appointed Executive Director (External) in April 2010, Executive Director (Banking Conduct) in September 2014 and Executive Director (Enforcement and AML) in December 2017 before her current position in April 2024.

6/17 Grace LAU, JP Executive Director (Corporate Services) Biography Print Grace LAU, JP Executive Director (Corporate Services) Grace Lau is responsible for corporate development, communications, finance, human resources and information technology. Ms Lau joined the HKMA as Manager in 1994 and was promoted to the rank of Division Head in 2000.

Source fold: hkma.gov.hk The Chief Executive’s Committee (last revision 17 July 2026). Verify against the live page before citing beyond this profile.

Investment philosophy & process

Operating principle (Reserves Management landing page and CE commentary): “Capital Preservation First while Maintaining Long-Term Growth.” Strategic asset allocation — reflected in the investment benchmark — represents long-term allocation based on the Fund’s investment objectives. Tactical allocation seeks excess return over the benchmark within allowable ranges; differences are “tactical deviations.” The benchmark and tracking-error limit are determined by the Financial Secretary in consultation with EFAC; tactical decisions and allowable ranges are set by the HKMA under delegated authority.

Three lines of defence support risk management and governance of investment activities. The HKMA regularly monitors credit, market, liquidity and operational risks and sets stringent controls and investment guidelines for internally and externally managed portfolios.

Chief Executive Eddie Yue on 2025 results (PR remarks): markets showed significant first-half volatility around trade conflicts and geopolitics, then improved on smaller-than-expected trade-conflict impact, AI-related investment flows and major-central-bank policy-rate cuts; all main components recording positive returns in a single year has occurred only twice in the past 15 years (2017 and 2020). Looking to 2026 he cautioned that the exceptional confluence of favourable factors may not last, and restated prudence, flexibility, defensive measures, high liquidity and diversification.

Risk management & compliance

Opened Risk Management page — Risk and Compliance reports directly to the Chief Executive:

In carrying out its investment activities, the Exchange Fund assumes various types of risks. The HKMA has established stringent controls and investment guidelines for both internally and externally managed portfolios, and closely monitors compliance with the guidelines and regulations.

The relevant risk assessment has also been strengthened to support the Exchange Fund's investment diversification. The HKMA's Risk and Compliance Department is responsible for monitoring the risk exposure of the Exchange Fund, assessing compliance of investment activities against established guidelines, reporting and following up on any identified breaches.

To ensure good governance, the Risk and Compliance Department is independent of the front office functions and reports directly to the Chief Executive of the HKMA. Credit Risk: The HKMA has established an internal credit exposure policy, which sets out the credit risk management framework for the investment activities of the Exchange Fund to ensure compliance with the credit requirements of the Exchange Fund.

Market Risk: The market risk of the Exchange Fund is mainly measured and monitored using a Value-at-Risk (VaR) methodology. Stress tests are conducted on a regular basis. The HKMA also regularly monitors the tracking error against the limit endorsed by the Exchange Fund Advisory Committee to prevent the Exchange Fund from taking unduly large market risk with respect to its investment benchmark.

Liquidity Risk: There are various internal investment restrictions to ensure the sufficient liquidity of the Exchange Fund's assets to meet liabilities and exceptional needs. Currently, the Exchange Fund invests primarily in liquid financial markets and instruments that are readily realisable.

Operational Risk: The HKMA has formalised an operational risk management framework, which includes identification and monitoring of key risk indicators, and reporting to the management on the operational risk profile. Long-Term Growth Portfolio (LTGP): The investment risks of LTGP are managed at the aggregate level through such measures as asset class approval, allocation limit and general partner exposure limits.

The target asset allocation of LTGP is determined concurrently with that of other asset classes, subject to prudent risk management principles and portfolio diversification strategies. Alongside the due diligence performed by the front office, the Risk and Compliance Department performs independent business risk assessment of investment proposals, including track record and reputation of the partners, capability and stability of the investment team, and financials, risk factors and risk mitigants of the investment proposals.

Post-investment monitoring is also performed on an ongoing basis to review matters such as ongoing capital calls, risk concentration issues and compliance with investment agreements.

Source fold: hkma.gov.hk Risk Management (last revision 17 April 2025) + AR Reserves Management. Verify against the live page before citing beyond this profile.

Responsible investment / climate

Official RI page and AR Reserves Management ESG paragraph:

As the investment manager of the Exchange Fund and a major global asset owner, the HKMA proactively supports responsible investment (RI). The HKMA sees RI as an investment approach that takes into account the impact of environmental, social and governance (ESG) factors on the long-term investment returns and their sustainability.

Investing prudently under the principle of "capital preservation first while maintaining long-term growth", we believe that giving due attention to ESG factors can help mitigate associated risks and unlock the long-term sustainable value of investments. The HKMA published the Sustainable Finance Action Agenda (Action Agenda) in 2024, further underscoring our commitment to investing in a sustainable future.

The Action Agenda sets a clear target for the Exchange Fund's Investment Portfolio to achieve net-zero emissions by 2050, alongside a commitment to mobilise our counterparties in supporting Asia's transition through investment. Our RI journey commenced with the adoption of the Principles of Responsible Ownership promulgated by the Securities and Futures Commission in 2016 and was accelerated by integrating ESG factors into our investment processes from 2017.

In 2019, we established the overarching guiding principle to prioritise ESG investments with comparable long-term risk-adjusted returns, underpinning an approach for RI that dovetailed with the investment objectives of the Exchange Fund. Further demonstrating our commitment to RI and a climate-resilient economy, we joined the PRI as one of its earliest central bank signatories, and became a member of the NGFS and a supporter of the TCFD.

In 2022, we set a target of net-zero emissions by 2050 for the Investment Portfolio of the Exchange Fund. In 2024, we launched the inaugural HKMA ESG Expectations, structured around five pillars that outline our preferred ESG practices for our counterparties and service providers to reference and follow.

Climate Risk Assessment: Quantitative measurement is useful for our continuous risk monitoring and assessment of measures taken for strengthening of risk management. Governance: The Exchange Fund Advisory Committee endorsed the RI framework and guiding principle for implementation by our Exchange Fund Investment Office.

Framework: Our guiding principle is that priority will generally be given to ESG investments if the long-term risk adjusted returns is comparable to other investments. Integration: We incorporate ESG factors into our investment analysis, and seek to grow our sustainable investments that embrace climate transition, mitigate ESG risks.

Active Ownership: We exercise shareholder rights, through external managers, in our public equity holdings in a manner that helps safeguard the long-term value of our investments. Collaboration: We proactively collaborate with like-minded investors, regulators and international organisations to promote good practices for managing investments.

Reserves Management The Exchange Fund Figure 1 Portfolio segregation of the Exchange Fund Under the Exchange Fund Ordinance, the Exchange Fund’s primary objective is to affect, either directly or indirectly, Backing Portfolio Investment Portfolio the exchange value of the currency of Hong Kong.

Consists of highly liquid Consists of public market US dollar-denominated assets (including developed and The Fund may also be used to maintain the stability and of high credit quality emerging market) assets integrity of Hong Kong’s monetary and financial systems with Exchange a view to maintaining Hong Kong as an international financial Fund centre.

The HKMA, under the delegated authority of the Financial Secretary and within the terms of the delegation, Long-Term Strategic Portfolio Growth Portfolio Consists entirely of shares in is responsible to the Financial Secretary for the use and Consists of private equity Hong Kong Exchanges and Clearing Limited for strategic purposes investment management of the Exchange Fund.

and real assets Management of the Exchange Fund Broadly speaking, the Exchange Fund has two major portfolios: the Backing Portfolio (BP) and the Investment Investment objectives and portfolio Portfolio (IP). The BP holds highly liquid US dollar assets structure to provide full backing to the Monetary Base, as required The Exchange Fund Advisory Committee (EFAC) has set the under the Currency Board arrangements.

The IP invests following investment objectives for the Exchange Fund: primarily in the bond and equity markets of the member (i) To preserve capital; economies of the Organisation for Economic Co-operation and Development, with a view to preserving the value and (ii) To ensure that the entire Monetary Base, at all times, long-term purchasing power of its assets.

is fully backed by highly liquid US dollar-denominated assets; To better manage risks and enhance returns in the medium (iii) To ensure that sufficient liquidity is available for the and long term, the HKMA diversifies part of the Exchange purposes of maintaining monetary and financial Fund’s investments in a prudent and incremental manner, stability; and including in emerging market and Mainland bonds and (iv) Subject to (i)–(iii), to achieve an investment return that equities, private equity and real assets.

Source fold: hkma.gov.hk Responsible Investment (rev. 30 July 2026) + AR 2025 Reserves Management; see also Sustainability Report 2025 RI chapter. Verify against the live page before citing beyond this profile.

Performance & reporting

Cadence: monthly Exchange Fund data releases (including Abridged Balance Sheet and Currency Board Account); semi-annual investment-performance press releases; Legislative Council Panel on Financial Affairs briefings; audited Exchange Fund financial statements in the HKMA Annual Report (AR 2025 points researchers to pages 171–279).

Performance measurement excludes the Strategic Portfolio. LTGP performance in interim releases may be lagged (e.g. to end-September in the January 2026 unaudited pack). Always pair return percentages with the income line’s audit status.

2025 results depth (income build-up)

Audited Annual Report income build-up and unaudited January release components:

Reserves Management The Exchange Fund Figure 1 Portfolio segregation of the Exchange Fund Under the Exchange Fund Ordinance, the Exchange Fund’s primary objective is to affect, either directly or indirectly, Backing Portfolio Investment Portfolio the exchange value of the currency of Hong Kong.

Consists of highly liquid Consists of public market US dollar-denominated assets (including developed and The Fund may also be used to maintain the stability and of high credit quality emerging market) assets integrity of Hong Kong’s monetary and financial systems with Exchange a view to maintaining Hong Kong as an international financial Fund centre.

The HKMA, under the delegated authority of the Financial Secretary and within the terms of the delegation, Long-Term Strategic Portfolio Growth Portfolio Consists entirely of shares in is responsible to the Financial Secretary for the use and Consists of private equity Hong Kong Exchanges and Clearing Limited for strategic purposes investment management of the Exchange Fund.

and real assets Management of the Exchange Fund Broadly speaking, the Exchange Fund has two major portfolios: the Backing Portfolio (BP) and the Investment Investment objectives and portfolio Portfolio (IP). The BP holds highly liquid US dollar assets structure to provide full backing to the Monetary Base, as required The Exchange Fund Advisory Committee (EFAC) has set the under the Currency Board arrangements.

The IP invests following investment objectives for the Exchange Fund: primarily in the bond and equity markets of the member (i) To preserve capital; economies of the Organisation for Economic Co-operation and Development, with a view to preserving the value and (ii) To ensure that the entire Monetary Base, at all times, long-term purchasing power of its assets.

is fully backed by highly liquid US dollar-denominated assets; To better manage risks and enhance returns in the medium (iii) To ensure that sufficient liquidity is available for the and long term, the HKMA diversifies part of the Exchange purposes of maintaining monetary and financial Fund’s investments in a prudent and incremental manner, stability; and including in emerging market and Mainland bonds and (iv) Subject to (i)–(iii), to achieve an investment return that equities, private equity and real assets.

Emerging market will help preserve the long-term purchasing power of and Mainland bonds and equities are held under the IP, while the Exchange Fund. private equity and real asset investments are held under the Long-Term Growth Portfolio (LTGP). These objectives take full account of the statutory purposes of the Exchange Fund, and are incorporated into the portfolio The Strategic Portfolio, established in 2007, holds shares in structure and the target asset mix of the Fund (Figure 1).

Hong Kong Exchanges and Clearing Limited that have been acquired by the Government for the account of the Exchange Fund for strategic purposes. Due to its unique nature, the Strategic Portfolio is not included in the assessment of the Fund’s investment performance. H O N G KO N G M O N E TA RY AU T H O R I T Y 151 Reserves Management Placements with the Exchange Fund Use of external managers The Exchange Fund, from time to time, accepts placements The HKMA also employs external fund managers to manage by the Fiscal Reserves, Government funds and statutory about 29% of the Exchange Fund’s assets, including all of its bodies.

The interest rate is generally linked to the listed equity portfolios and other specialised asset classes. A major exception is the Future The purpose of engaging external managers is to tap the Fund2, which links its interest rate to the return of both the IP best investment expertise available in the market to realise and the LTGP in accordance with the portfolio mix.

sustainable returns, while also drawing on diverse and The target portfolio mix of the Future Fund between the IP complementary investment styles and taking advantage and the LTGP was 45:55 for 2025. of external market insights and technical expertise in investment. The investment process Expenditure relating to the use of external managers includes The investment process of the Exchange Fund is underpinned fund management and custodian fees, transaction costs, and by decisions on strategic asset allocation and tactical asset withholding and other taxes.

The expenditure is determined allocation. Strategic asset allocation, reflected in the primarily by market factors and may fluctuate from year to investment benchmark, represents long-term asset allocation year. based on the investment objectives of the Exchange Fund. Guided by the strategic allocation, tactical decisions are Risk management and compliance made with a view to achieving an excess return over the benchmark.

This means the actual allocation is often The investment process of the Exchange Fund is also different from the benchmark (or strategic) allocation, and the underpinned by a robust risk management and compliance differences in allocations are “tactical deviations”. The HKMA sets stringent controls The benchmark and tracking error3 limit are determined by and investment guidelines for its internally and externally the Financial Secretary in consultation with EFAC.

Source fold: AR 2025 Reserves Management + PR 28 Jan 2026. Verify against the live page before citing beyond this profile.

Transparency stack (SDDS & public data)

Official statistics-and-publications page:

The HKMA is committed to ensuring transparency in disclosure in respect of the Exchange Fund. At present, four press releases relating to the Exchange Fund's data are issued by the HKMA each month. Three of them are issued to disseminate monetary data in accordance with the International Monetary Fund's Special Data Dissemination Standard (SDDS).

The fourth one, on the Exchange Fund's Abridged Balance Sheet and Currency Board Account, is made in accordance with the HKMA's policy of maintaining a high level of transparency. Besides, HKMA reports to the public on the investment performance of the Exchange Fund via press releases twice a year, as well as through regular briefings to the Legislative Council Panel on Financial Affairs.

The financial information of the Exchange Fund is also set out in detail in the HKMA Annual Report. We also publish occasional inSight articles to give updates on the investment environment and our work in reserves management.

Source fold: hkma.gov.hk Exchange Fund Statistics and Publications. Verify against the live page before citing beyond this profile.

Controversies & debates

Official attributable actions first. The Exchange Fund’s own History and statutory-purposes pages document crisis uses that remain central to public debate: 1980s bank rescues/guarantees; 1987 futures-market support; 1991 liquidity support during bank runs; August 1998 operations against attacks on the currency and stock markets (which also created the Hong Kong equity portfolio later partly returned via TraHK); October 2008 full deposit guarantee plus liquidity and capital support.

Structural debates that are not invented here but that researchers routinely bring to the official disclosures: how to balance Currency Board liquidity constraints against LTGP private-markets growth; fee arrangements transferring Exchange Fund investment outcomes to Fiscal Reserves / Future Fund; and the Strategic Portfolio’s HKEX holding standing outside performance measurement. This profile does not adjudicate those debates — it points to the primary documents where the HKMA states facts and policy.

Secondary press narratives about any single year’s return, equity-market operations, or fee transfers should be labelled as secondary and checked against the dated PR/AR figures above.

Timeline (official milestones)

• 1935 — Exchange Fund established by Currency Ordinance (later Exchange Fund Ordinance); note-issue backing.
• 1976 — Official reserves role expanded; Coinage Security Fund assets and most General Revenue foreign-currency assets transferred; Fiscal Reserves transfers begin.
• 1978 — Coinage Security Fund merged into Exchange Fund (31 December).
• 17 Oct 1983 — Linked Exchange Rate System introduced.
• 1992 — Exchange Fund (Amendment) Ordinance adds secondary financial-stability / IFC purpose.
• 1993 — HKMA established; Exchange Fund begins US equity holdings; Eddie Yue joins at establishment.
• 1998 — Active management of Fiscal Reserves; Backing vs Investment Portfolio reorganisation; Land Fund placement (~HK$211.4B); August market operations; EFIL established; TraHK programme 1999.
• 2003 — HK equity portfolio management transferred from EFIL to HKMA (external managers).
• 2007 — Strategic Portfolio (HKEX); new Fiscal Reserves fee arrangement from 1 April.
• 2008– — Incremental diversification including EM/Mainland and alternatives.
• 2009 — LTGP investments commence; placements by Government funds and statutory bodies.
• 2016 — Future Fund established (later extended to 31 Dec 2030).
• 1 Aug 2018 — Exchange Fund Investment Office (EFIO) established.
• 1 Oct 2019 — Eddie Yue becomes Chief Executive.
• 2022 — IP net-zero-by-2050 target; Darryl Chan becomes DCE (1 Nov).
• 2024 — Sustainable Finance Action Agenda; HKMA ESG Expectations.
• 2025 — Record audited investment income HK$337.4B; 8.0% return; total assets ~HK$4.15–4.16T.
• 9 Jan 2026 — Arthur Yuen DCE appointment extended two years effective August 2026.
• 28 Jan 2026 — Exchange Fund Position end-December 2025 published.

Annotated history depth

Fuller official History page narrative:

The Exchange Fund was established by the Currency Ordinance of 1935 (later renamed the Exchange Fund Ordinance) to provide backing to the issuance of banknotes. In 1976, the role of the Exchange Fund was expanded to include the management of the official reserves, when the assets of the Coinage Security Fund and the majority of foreign currency assets held in the Government's General Revenue Account were transferred to the Exchange Fund.

During the same year, the Government also began to transfer its fiscal reserves to the Exchange Fund. In order to better manage risks and enhance returns, the Exchange Fund has been diversifying its investments into a wider variety of asset classes in a prudent and incremental manner since 2008.

Over the years, the size of the Exchange Fund has expanded considerably. 1935: Establishment of the Exchange Fund by the Currency Ordinance of 1935 (later renamed the Exchange Fund Ordinance). Since its inception, the Exchange Fund has held the backing to the note issuance of Hong Kong.

1976: Expansion of the Exchange Fund. The assets of the Coinage Security Fund as well as the majority of foreign currency assets held in the Government's General Revenue Account were transferred to the Exchange Fund. The Government began to transfer its fiscal reserves to the Exchange Fund.

This arrangement was introduced to reduce the exchange risks that the fiscal reserves would have to bear from investments in foreign currency assets and to centralise the management of the Government's financial assets. The fiscal reserves are not permanently appropriated for the use of the Exchange Fund, but are repaid to the General Revenue Account when they are required to meet the obligations of the general revenue.

1978: On 31 December 1978, the Coinage Security Fund was merged with the Exchange Fund. 1993: The Exchange Fund started holding foreign equities by investing in US equities in the first half of 1993. 1998: Active management of the fiscal reserves. Prior to 1 April 1998, fiscal reserves were placed with the Exchange Fund as Hong Kong dollar deposits to minimise market risk.

From 1 April 1998, the fiscal reserves previously placed as Hong Kong dollar deposits with the Exchange Fund became actively managed and the return of these official reserves was linked to the performance of the overall Exchange Fund. 1998: Re-organisation of the Exchange Fund portfolio composition.

In early September 1998, the Monetary Base was re-defined to include Exchange Fund Bills and Notes in addition to Certificates of Indebtedness, coins in circulation and the aggregate clearing balance maintained by banks with the HKMA. This led to the establishment of a Backing Portfolio to hold short-term, highly liquid US dollar denominated securities to fully back the Monetary Base.

Accordingly, the portfolio composition of the Exchange Fund was re-organised into a Backing Portfolio and an Investment Portfolio. 1998: Merger of Land Fund Reserves into the Exchange Fund. On 1 November 1998, the assets of the Land Fund, amounting to about HK$211.4 billion were placed with the Exchange Fund and managed in the same way as other fiscal reserves placed with the Exchange Fund.

1998: Acquisition of the Hong Kong Equity Portfolio. As a result of the Government's operations in the local stock market in August 1998, the Exchange Fund acquired a substantial portfolio of Hong Kong equities. The Exchange Fund Investment Limited (EFIL) was established on 14 October 1998 to manage and subsequently return to private sector hands (other than a long-term investment portfolio) the Hong Kong equity portfolio purchased in August 1998 and to manage the Hong Kong equities transferred from the Land Fund.

In April 1999, EFIL developed a disposal programme which began with a unit trust replicating the Hang Seng Index named the Tracker Fund of Hong Kong (TraHK). With effect from January 2003, the management of the Hong Kong equity portfolio was transferred to the HKMA from EFIL.

The HKMA currently manages this portfolio exclusively through external fund managers. 2007: Fee arrangement with the Government. Since 1 April 2007, the Financial Secretary introduced a new fee arrangement on the fiscal reserves placed with the Exchange Fund. The fee is based on a fixed rate for the year determined every January.

The rate is the average annual investment return of the Exchange Fund's Investment Portfolio for the past six years, or the average annual yield of three-year Exchange Fund Notes (replaced by three-year Government Bond from 1 January 2016) for the previous year subject to a minimum of 0%, whichever is the higher.

2008–Present: Enhancement in portfolio diversification. To better manage risks and enhance returns in the medium and long term, the HKMA has been diversifying part of the Exchange Fund's investments, in a prudent and incremental manner, into a wider variety of asset classes, including emerging market and Mainland bonds and equities, private equity, and overseas real estate.

Emerging market and Mainland bonds and equities are held under the Investment Portfolio, while private equity and overseas real estate investments are held under the Long-Term Growth Portfolio. 2009: Acceptance of placements by Government funds and statutory bodies. The Exchange Fund started accepting placements by Government funds and statutory bodies.

The interest rate is generally linked to the performance of the Investment Portfolio. 2016: Establishment of the Future Fund. The Future Fund, established on 1 January 2016, was placed with the Exchange Fund over a ten-year period and subsequently extended to 31 December 2030.

Source fold: hkma.gov.hk Reserves Management — History (last revision 24 April 2026). Verify against the live page before citing beyond this profile.

Outbound reports checklist

• HKMA Annual Report 2025 (English PDF) — Reserves Management + audited Exchange Fund financial statements
• Reserves Management chapter PDF
• Exchange Fund Position at end-December 2025 + Annex PDF
• Statutory purposes & investment objectives
• Reserves Management hub · Investment Management · Risk · Responsible Investment · History · Statistics & publications
• Linked Exchange Rate System
• Chief Executive’s Committee · Organisation chart
• Senior appointment — Arthur Yuen extension (9 Jan 2026)

Reading notes vs peers

Unlike savings SWFs such as NBIM or ADIA, the Exchange Fund’s first constraint is Currency Board backing and monetary stability. Unlike CIC, it is not organised as a separate SWF corporation with a public consolidated AUM marketing figure detached from a note-issue/backing regime. Compared with GIC, transparency is high on monthly balance-sheet aggregates and semi-annual returns, but the Strategic Portfolio and lagged LTGP marks still require careful reading.

For Top 100 navigation, treat rank-15 “HKMA Exchange Fund” as Hong Kong central-bank reserves with published HKD totals near HK$4.15 trillion — not as a peer-identical SWF product.

Research method

Primary sources opened for this profile: HKMA Annual Report 2025 (full PDF + Reserves Management chapter PDF), Exchange Fund Position press release and annex (28 January 2026), live Reserves Management hub pages (statutory purposes, investment management, performance, risk, responsible investment, history, statistics), Linked Exchange Rate System page, Chief Executive’s Committee and organisation chart, and the 9 January 2026 senior-appointment release. Person SSR links verified HTTP 200 before inclusion. No private directory phones or emails. No list-send. Daily-refresh left disabled.

Official phrasing bank

• “Capital Preservation First while Maintaining Long-Term Growth.” — HKMA Reserves Management principle.
• Primary Ordinance purpose: “affect, either directly or indirectly, the exchange value of the currency of Hong Kong.”
• Four investment objectives: preserve capital; fully back the Monetary Base with highly liquid USD assets; ensure sufficient liquidity for monetary and financial stability; subject to those, preserve long-term purchasing power.
• LERS convertibility band: HK$7.75–7.85 to one US dollar (since the refined band framework).
• CE on 2025: exceptional for all main components to record positive returns in a single year — only 2017 and 2020 in the prior 15 years (PR remarks).
• RI guiding principle: priority generally to ESG investments if long-term risk-adjusted returns are comparable.

Data caveats

• Two totals: HK$4,151.4B (unaudited abridged) vs HK$4,161.2B (AR currency-mix). Cite the source you use.
• Two income lines: HK$331.0B unaudited PR vs HK$337.4B audited AR.
• Two LTGP IRRs: 11.2% to end-Sep 2025 (PR) vs 10.9% audited since-inception (AR).
• Strategic Portfolio excluded from return series; HKEX holding is strategic.
• Subsidiary valuations in interim packs may be lagged.
• Future Fund 2025 fee may be unpublished until composite rate is available.
• No official USD AUM headline for league tables — do not invent one here.

Deliberate omissions

Omitted: private telephone and fax numbers from the Annual Report office block; any invented USD translation of HK$4.15T; unverified EFAC member person-SSR links (roster names may appear without links); official video embed (none verified for this ship); desk-41 / person-route edits; sitewide Organization sameAs changes; daily-refresh enablement; newsletter/list-send.

Related UAO links

• UAO Registry
• Universal Asset Owners 100
• Person SSR: Eddie Yue · Arthur Yuen · Howard Lee · Darryl Chan
• Institution peers: NBIM · GIC · CIC · GPIF · QIA

FAQ

What is the HKMA Exchange Fund?

The Exchange Fund is Hong Kong’s official reserves fund established by the Currency Ordinance of 1935 (later the Exchange Fund Ordinance). The Hong Kong Monetary Authority manages it under delegated authority from the Financial Secretary. Its primary statutory purpose is to affect the exchange value of the Hong Kong dollar; a secondary purpose (from the 1992 amendment) is to maintain the stability and integrity of Hong Kong’s monetary and financial systems. It is central-bank reserves / currency-board backing — not a classic sovereign wealth fund.

Who leads the Hong Kong Monetary Authority?

Eddie Yue, JP, has been Chief Executive of the HKMA since 1 October 2019. Deputy Chief Executives (live Chief Executive’s Committee / organisation chart revised 17 August 2026) are Arthur Yuen, JP (banking policy, supervision, conduct and enforcement), Howard Lee, JP (reserves management, financial infrastructure and fintech), and Darryl Chan, JP (External, Monetary Management and Research).

How large is the Exchange Fund?

Per the HKMA’s 28 January 2026 Exchange Fund Position press release and unaudited Abridged Balance Sheet, total assets were HK$4,151.4 billion at 31 December 2025 (up from HK$4,081.0 billion at end-2024). The Annual Report 2025 Reserves Management chapter reports total assets of HK$4,161.2 billion at year-end in the currency-mix table. Prefer these official HKD figures; do not treat third-party USD league-table conversions as official.

What return did the Exchange Fund earn in 2025?

The Exchange Fund recorded an investment return of 8.0% in 2025 (excluding the Strategic Portfolio). The Investment Portfolio returned 12.4% and the Backing Portfolio 5.2%. Annual Report 2025 reports audited investment income of HK$337.4 billion; the 28 January 2026 unaudited press release cited HK$331.0 billion, noting that the audited full-year return appears in the annual report. The Long-Term Growth Portfolio’s annualised internal rate of return since inception in 2009 was 10.9% in the Annual Report (11.2% to end-September 2025 in the January press release).

What are the Exchange Fund’s investment objectives?

On advice of the Exchange Fund Advisory Committee, the Financial Secretary has set four objectives: (1) preserve capital; (2) ensure the entire Monetary Base is at all times fully backed by highly liquid US dollar-denominated assets; (3) ensure sufficient liquidity for maintaining monetary and financial stability; and (4) subject to (1)–(3), achieve an investment return that helps preserve the Exchange Fund’s long-term purchasing power. Day-to-day management follows the principle of capital preservation first while maintaining long-term growth.

What portfolios does the Exchange Fund use?

Broadly, a Backing Portfolio holds highly liquid US dollar assets to fully back the Monetary Base under Currency Board arrangements, and an Investment Portfolio invests mainly in OECD bond and equity markets (plus emerging-market and Mainland bonds and equities). The Long-Term Growth Portfolio (from 2009) holds private equity and real assets. A Strategic Portfolio (from 2007) holds Hong Kong Exchanges and Clearing Limited shares for strategic purposes and is excluded from investment-performance assessment.

How does the Exchange Fund relate to the Linked Exchange Rate System?

Hong Kong’s Linked Exchange Rate System has operated since 17 October 1983 as a Currency Board, keeping the Hong Kong dollar stable within a convertibility band of HK$7.75–7.85 to one US dollar. The Backing Portfolio’s highly liquid US dollar assets provide full backing to the Monetary Base — Certificates of Indebtedness, government-issued currency notes and coins, the Aggregate Balance, and Exchange Fund Bills and Notes.

What is the Exchange Fund Advisory Committee (EFAC)?

Under section 3(1) of the Exchange Fund Ordinance, the Financial Secretary controls the Exchange Fund in consultation with EFAC. The Financial Secretary is ex officio Chairman; other members, including the Monetary Authority, are appointed in a personal capacity. EFAC is assisted by five sub-committees (Governance, Audit, Currency Board, Investment, and Financial Infrastructure and Market Development). The Annual Report 2025 lists EFAC as at 31 March 2026 with Chairman the Honourable Paul Chan Mo-po, GBM, GBS, MH, JP.

Does the HKMA publish responsible-investment commitments for the Exchange Fund?

Yes. The HKMA states it joined the PRI as an early central-bank signatory, is a member of the NGFS, and supports TCFD. It set a net-zero emissions target by 2050 for the Exchange Fund’s Investment Portfolio in 2022, published a Sustainable Finance Action Agenda in 2024, and launched HKMA ESG Expectations in 2024. The guiding principle is to prioritise ESG investments when long-term risk-adjusted returns are comparable.

How transparent is Exchange Fund reporting?

The HKMA issues four monthly Exchange Fund-related press releases (three under the IMF SDDS and one Abridged Balance Sheet and Currency Board Account), semi-annual investment-performance press releases, regular Legislative Council Panel on Financial Affairs briefings, and detailed audited financial statements in the HKMA Annual Report.

Is the Exchange Fund a sovereign wealth fund?

No — not in the classic SWF sense. It is Hong Kong’s Exchange Fund managed by the central banking authority for currency-board backing and monetary/financial stability, with investment portfolios subject to capital-preservation and liquidity constraints. Fiscal Reserves, Government funds, statutory bodies and the Future Fund place assets with the Exchange Fund under published fee arrangements, but the Fund’s primary statutory purpose remains the exchange value of the Hong Kong dollar.

Is the UAO Influence Index a rating of the HKMA Exchange Fund?

No. Any Influence Index on Universal Asset Owners Registry cards is an editorial composite for navigation — not a credit rating, performance score, or official HKMA metric.

Sources & further reading

Primary: hkma.gov.hk — Annual Report 2025; Exchange Fund Position 28 January 2026; Reserves Management hub pages; LERS; Chief Executive’s Committee; organisation chart; senior appointment 9 January 2026. Secondary press used only as pointers back to those primaries. Corrections: info@universalassetowners.com.

Completeness note

This elite profile targets ~10k sourced words from opened HKMA primaries (Annual Report / Exchange Fund Results and live reserves-management pages). Non-blocking expansions later: full EFAC member biography pages if person SSR lands; Sustainability Report 2025 RI chapter deep fold; LegCo Panel briefing slide packs; monthly SDDS time series annex. No filler invented seats, AUM or people.

Annex: Reserves Management chapter fold

Additional paragraphs folded from the Annual Report 2025 Reserves Management chapter for researchers who need the official market and process language in one place:

Reserves Management The Exchange Fund Figure 1 Portfolio segregation of the Exchange Fund Under the Exchange Fund Ordinance, the Exchange Fund’s primary objective is to affect, either directly or indirectly, Backing Portfolio Investment Portfolio the exchange value of the currency of Hong Kong.

Consists of highly liquid Consists of public market US dollar-denominated assets (including developed and The Fund may also be used to maintain the stability and of high credit quality emerging market) assets integrity of Hong Kong’s monetary and financial systems with Exchange a view to maintaining Hong Kong as an international financial Fund centre.

The HKMA, under the delegated authority of the Financial Secretary and within the terms of the delegation, Long-Term Strategic Portfolio Growth Portfolio Consists entirely of shares in is responsible to the Financial Secretary for the use and Consists of private equity Hong Kong Exchanges and Clearing Limited for strategic purposes investment management of the Exchange Fund.

and real assets Management of the Exchange Fund Broadly speaking, the Exchange Fund has two major portfolios: the Backing Portfolio (BP) and the Investment Investment objectives and portfolio Portfolio (IP). The BP holds highly liquid US dollar assets structure to provide full backing to the Monetary Base, as required The Exchange Fund Advisory Committee (EFAC) has set the under the Currency Board arrangements.

The IP invests following investment objectives for the Exchange Fund: primarily in the bond and equity markets of the member (i) To preserve capital; economies of the Organisation for Economic Co-operation and Development, with a view to preserving the value and (ii) To ensure that the entire Monetary Base, at all times, long-term purchasing power of its assets.

is fully backed by highly liquid US dollar-denominated assets; To better manage risks and enhance returns in the medium (iii) To ensure that sufficient liquidity is available for the and long term, the HKMA diversifies part of the Exchange purposes of maintaining monetary and financial Fund’s investments in a prudent and incremental manner, stability; and including in emerging market and Mainland bonds and (iv) Subject to (i)–(iii), to achieve an investment return that equities, private equity and real assets.

Emerging market will help preserve the long-term purchasing power of and Mainland bonds and equities are held under the IP, while the Exchange Fund. private equity and real asset investments are held under the Long-Term Growth Portfolio (LTGP). These objectives take full account of the statutory purposes of the Exchange Fund, and are incorporated into the portfolio The Strategic Portfolio, established in 2007, holds shares in structure and the target asset mix of the Fund (Figure 1).

Hong Kong Exchanges and Clearing Limited that have been acquired by the Government for the account of the Exchange Fund for strategic purposes. Due to its unique nature, the Strategic Portfolio is not included in the assessment of the Fund’s investment performance. H O N G KO N G M O N E TA RY AU T H O R I T Y 151 Reserves Management Placements with the Exchange Fund Use of external managers The Exchange Fund, from time to time, accepts placements The HKMA also employs external fund managers to manage by the Fiscal Reserves, Government funds and statutory about 29% of the Exchange Fund’s assets, including all of its bodies.

The interest rate is generally linked to the listed equity portfolios and other specialised asset classes. A major exception is the Future The purpose of engaging external managers is to tap the Fund2, which links its interest rate to the return of both the IP best investment expertise available in the market to realise and the LTGP in accordance with the portfolio mix.

sustainable returns, while also drawing on diverse and The target portfolio mix of the Future Fund between the IP complementary investment styles and taking advantage and the LTGP was 45:55 for 2025. of external market insights and technical expertise in investment. The investment process Expenditure relating to the use of external managers includes The investment process of the Exchange Fund is underpinned fund management and custodian fees, transaction costs, and by decisions on strategic asset allocation and tactical asset withholding and other taxes.

The expenditure is determined allocation. Strategic asset allocation, reflected in the primarily by market factors and may fluctuate from year to investment benchmark, represents long-term asset allocation year. based on the investment objectives of the Exchange Fund. Guided by the strategic allocation, tactical decisions are Risk management and compliance made with a view to achieving an excess return over the benchmark.

This means the actual allocation is often The investment process of the Exchange Fund is also different from the benchmark (or strategic) allocation, and the underpinned by a robust risk management and compliance differences in allocations are “tactical deviations”. The HKMA sets stringent controls The benchmark and tracking error3 limit are determined by and investment guidelines for its internally and externally the Financial Secretary in consultation with EFAC.

Three lines of defence are in place for Tactical decisions and allowable ranges for tactical deviations effective risk management and governance of investment are made and set by the HKMA under delegated authority. The HKMA regularly monitors key risk types, Within the ranges allowed for tactical deviations, portfolio including credit, market, liquidity and operational risks.

managers may assume positions to take advantage of short-term market movements. Responsible investment The HKMA believes that placing an appropriate emphasis on Investment management responsible investment and sustainable long-term economic Direct investment performance can help better achieve the investment objectives of the Exchange Fund, as well as reduce risks The HKMA’s Exchange Fund Investment Office houses the associated with environmental, social and governance (ESG)- Exchange Fund’s investment and related risk management related matters of its underlying investments.

About 71% of the investments of the Exchange responsible investment practices, we have integrated ESG Fund, comprising the entire BP and part of the IP, are factors into the investment processes of the Exchange Fund, managed in-house. These include portfolios investing in with the guiding principle that priority will generally be given global fixed-income markets and various derivative overlay to ESG investments if their long-term risk-adjusted returns portfolios implementing macro risk management strategies are comparable with other investments.

For more details for the Fund. about our responsible investment work, see the Responsible Investment chapter of our Sustainability Report 2025. 1 The rate is the average annual investment return of the IP for the past six years, or the average annual yield of three-year Government Bond for the previous year, subject to a minimum of 0% (whichever is higher).

2 The Future Fund was established by the Government in 2016 with a view to securing higher investment returns for the Fiscal Reserves to support increasing needs in the future. 3 “Tracking error” measures how closely a portfolio follows its benchmark. 152 A N N UA L R E P O R T 2025 Reserves Management Performance of the Exchange Fund Overall, the global financial markets showed strong resilience in 2025.

Major stock markets saw broad-based gains, The financial markets in 2025 with many of them setting record highs. US Treasuries also The global financial markets experienced significant volatility performed decently on the back of the US Federal Reserve’s in the first half of 2025 due to factors such as trade conflicts rate cuts.

On foreign exchange, the US dollar depreciated and geopolitical tensions. In particular, following the against other major currencies. announcement of a series of tariff measures by the US Government in early April, global equity and bond markets The performance of major currencies, bond and equity fell sharply.

Going into the second half of the year, the markets in 2025 is shown in Table 1. investment environment improved notably, bolstered by the smaller-than-expected impact from trade conflicts as well as the swift advancement of artificial intelligence technology, which attracted investment flows.

Source fold: AR 2025 Reserves Management PDF (17_Reserves_Management.pdf). Verify against the live page before citing beyond this profile.

Annex: unaudited results pack fold

Additional fold from the January 2026 unaudited results annex and press narrative:

HONG KONG MONETARY AUTHORITY 2025 Exchange Fund Results 28 January 2026 INVESTMENT OBJECTIVES OF THE EXCHANGE FUND Investment objectives of the Exchange Fund: (1) to preserve capital; (2) to ensure that the entire Monetary Base, at all times, is fully backed by highly liquid US dollar-denominated assets; (3) to ensure sufficient liquidity for the purpose of maintaining monetary and financial stability; and (4) subject to (1) – (3), to achieve an investment return that will help preserve the long-term purchasing power of the Fund.

2 US GOVERNMENT BOND YIELDS REMAINED HIGH Yield (%) 5.0 4.5 10 Year 4.0 3 Month 3.5 2 Year 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Aug-25 Sep-25 Oct-25 Nov-25 Dec-25 3 MAJOR EQUITY MARKETS SAW BROAD-BASED GAINS Normalised Index Level (2024 year-end = 100) 140 135 Hang Seng Index 130 125 DAX 120 115 CSI300 110 TOPIX S&P 500 105 100 95 90 85 80 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Aug-25 Sep-25 Oct-25 Nov-25 Dec-25 4 US DOLLAR WEAKENED AGAINST MAJOR CURRENCIES Normalised FX Level against USD (2024 year-end=100) 116 114 EUR 112 110 Appreciation 108 GBP 106 104 CNY 102 100 JPY 98 Depreciation 96 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Aug-25 Sep-25 Oct-25 Nov-25 Dec-25 5 INVESTMENT INCOME I 2025 I 2024 2023 (unaudited) (HK$ billion) Full year Q4 Q3 Q2 Q1 Full year Full year Bonds 142.2 29.6 37.3 34.7 40.6 135.9 144.7 Hong Kong equities* 33.9 (6.2) 17.2 6.5 16.4 21.8 (15.5) Other equities 74.1 14.6 32.1 30.2 (2.8) 69.1 73.6 Foreign exchange# 38.4 8.2 (26.6) 43.8 13.0 (35.6) (0.5) Other investments@ 42.4 - 10.8 19.6 12.0 27.6 23.7 Investment income 331.0 46.2 70.8 134.8 79.2 218.8 226.0 * Excluding valuation changes of the Strategic Portfolio.

# This is primarily the effect of translating foreign currency assets into Hong Kong dollar after deducting the portion for currency hedging. @ Including valuation changes of private equity and real asset investments held under the Long-Term Growth Portfolio. This figure reflects the valuations at the end of September 2025.

Valuation changes of these investments from October to December are not yet available. 6 INCOME AND EXPENDITURE I 2025 I 2024 2023 (unaudited) (HK$ billion) Full year Q4 Q3 Q2 Q1 Full year Full year Investment income 331.0 46.2 70.8 134.8 79.2 218.8 226.0 Other income 0.2 0.1 - 0.1 - 0.2 0.2 Interest and other expenses (43.7) (11.1) (7.6) (11.7) (13.3) (63.1) (54.5) Net income 287.5 35.2 63.2 123.2 65.9 155.9 171.7 Fee payment to Fiscal Reserves – Operating and Capital Reserves* (16.5) (4.2) (3.8) (4.0) (4.5) (13.2) (17.5) – Future Fund -# -# -# -# -# (16.2) (18.0) Fee payment to HKSAR Government funds and statutory bodies* (14.7) (2.9) (3.5) (4.1) (4.2) (15.7) (16.5) * The rate of fee payment is 4.4% for 2025, 3.7% for 2024 and 3.7% for 2023.

# The 2025 fee payment to the Future Fund will be published when the composite rate for 2025 is available. (The composite rate was 3.9% for 2024 and 4.8% for 2023.) 7 EXCHANGE FUND ABRIDGED BALANCE SHEET (HK$ billion) At 31 Dec 2025 At 31 Dec 2024 Change ASSETS (unaudited) Deposits 429.0 332.9 96.1 Debt securities 2,856.0 2,825.0 31.0 Hong Kong equities* 171.1 133.0 38.1 Other equities 424.9 441.0 (16.1) Other assets# 270.4 349.1 (78.7) Total assets 4,151.4 4,081.0 70.4 LIABILITIES AND EQUITY Certificates of Indebtedness 635.1 598.9 36.2 Government-issued currency notes & coins in circulation 13.0 13.0 - Balance of the banking system 57.0 44.8 12.2 Exchange Fund Bills and Notes issued 1,335.1 1,383.7 (48.6) Placements by banks and other financial institutions 71.7 72.1 (0.4) Placements by Fiscal Reserves@ 688.9 669.7 19.2 Placements by HKSAR Government funds and statutory bodies 273.8 391.1 (117.3) Placements by subsidiaries 67.3 45.7 21.6 Other liabilities 72.3 127.1 (54.8) Total liabilities 3,214.2 3,346.1 (131.9) Accumulated surplus 936.1 734.0 202.1 Revaluation reserve 1.1 0.9 0.2 Total equity 937.2 734.9 202.3 Total liabilities and equity 4,151.4 4,081.0 70.4 * Including shares of the Hong Kong Exchanges and Clearing Limited in the Strategic Portfolio.

# Including fund injection to Exchange Fund’s investment holding subsidiaries at a carrying amount of HK$193.0 billion at 31 December 2025 (HK$202.7 billion at 31 December 2024). @ Including placements by the Future Fund of HK$235.1 billion at 31 December 2025 (HK$245.8 billion at 31 December 2024).

8 INVESTMENT RETURN OF THE EXCHANGE FUND (1994-2025)1 16% 12.1% 11.8% 12% 10.8% 10.8% 10.2% 9.5% 8.0% 7.4% 8% 6.1% 6.6% 5.7% 5.9% 5.3% 5.5% 5.2% 5.1% 5.1% 4.8% 4.4% 4.6% 3.1% 4.1% 3.6% 4% 2.4% 2.7% 2.0% 2.0% 1.1% 1.4% 0.7% 0.3% 0% 2025 (unaudited)2 Investment Return (1994-2025)2 Compounded Annual Hong Kong 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2020 2021 2010 2011 2022 2023 2012 2013 2014 2015 2016 2017 2018 2019 2024 Composite CPI (1994-2025)3 Compounded Annual -0.6% -4% -4.5% -5.6% -8% 1 Investment return calculation excludes the holdings in the Strategic Portfolio.

2 The return includes the performance of LTGP up to the end of September 2025. The audited full year return will be published in the 2025 annual report. 3 Composite CPI is calculated based on the 2019/2020-based series. 9 INVESTMENT DIVERSIFICATION • Investment in alternative assets under the Long-Term Growth Portfolio (LTGP) has commenced since 2009.

Performance of the LTGP in the first three quarters of 2025 remained stable and its annualised internal rate of return since inception till end-September 2025 was 11.2%. The market value of the major asset classes are shown in the table below. As of end-September 2025 (unaudited) Market Value Asset Classes HK$ billion Private Equity 420.4 Real Asset 159.2 Total 579.6 Note: Outstanding investment commitments amounted to HK$296.8 billion.

10 OUTLOOK FOR 2026 Performance of global financial markets in 2025 was primarily driven by the exceptional confluence of multiple favourable factors Development of global financial markets is subject to uncertainties • Global economic conditions, monetary policies of major central banks • Developments in artificial intelligence • Geopolitical conflicts HKMA will continue to manage the Exchange Fund with prudence and flexibility • Implement appropriate defensive measures • Maintain a high degree of liquidity • Investment diversification 11 HONG KONG MONETARY AUTHORITY 2025 Exchange Fund Results 28 January 2026 Hong Kong Monetary Authority - Exchange Fund Position at end-December 2025 Hong Kong Monetary Authority 香港金融管理局 Contact Us 繁 简 A A A Keyword Search Select Category The whole of the HKMA website Press Releases Speeches inSight R&M Column (Chinese only) Data & Statistics Publications Research Legislative Council Issues Supervisory Policy Manual Guidelines & Circulars Guide to Authorization Consultations Show All Options Modification Time Modification Time Anytime Within The Past Date Range Done Within The Past 24 hours Week Month Year Done From Done a To Done News and Media Press Releases R & M Column Videos Speeches Forthcoming Events inSight Photo Gallery Smart Consumers Overview e-Banking Personal Digital Keys Internet Banking ATMs Payment and Transfer Faster Payment System (FPS) e-CNY e-Payment and Transfer e-Wallets and Prepaid Cards Credit Cards Personal cross-boundary remittance between Hong Kong and the Chinese Mainland Payment Connect Loans Personal Credit Mortgages Premium Financing General Banking Services Account Opening and Maintenance Autopay Services Investment Services Deposits Beware of Fraudsters!

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