Hong Kong Monetary Authority: Forex funds recorded investment income of HK$331 billion in 2025.

The Hong Kong Monetary Authority (HKMA) today (January 28) announced the unaudited financial position of the Exchange Fund until the end of December 2025. The Exchange Fund recorded investment income of HK$331 billion in 2025, with the main components including: bond investment income of HK$142.2 billion; Hong Kong stock investment income of HK$33.9 billion; other stock investment income of HK$74.1 billion; foreign currency assets revaluation gain of HK$38.4 billion; and other investment income of HK$42.4 billion. The interest rate paid by the Exchange Fund to fiscal reserves deposits, the Hong Kong SAR Government funds, and statutory organizations deposits was 4.4% in 2025, with corresponding expenses of HK$16.5 billion and HK$14.7 billion. The summary of the Exchange Fund's balance sheet shows that total assets increased by HK$70.4 billion, from HK$4,081 billion at the end of 2024 to HK$4,151.4 billion at the end of 2025. As of the end of December 2025, the cumulative surplus of the Exchange Fund was HK$936.1 billion. The investment return rate of the Exchange Fund in 2025 was 8.0%, with the "investment portfolio" return rate at 12.4% and the "support portfolio" at 5.2%. The annualized internal rate of return for the "long-term growth portfolio" from 2009 to the end of September 2025 was 11.2%. HKMA Chief Executive Eddie Yue commented on the performance of the Exchange Fund in 2025, stating: "Global financial markets experienced significant volatility in the first half of 2025 due to factors such as trade frictions and geopolitical tensions, especially after the U.S. government announced a series of aggressive tariff measures in early April, leading to sharp declines in global stock and bond markets. As we entered the second half of the year, with the impact of trade friction less than expected and factors such as rapid development in artificial intelligence driving capital investment, the investment environment significantly improved. Major central banks cut policy rates during the year, which also helped boost market sentiment. Overall, global financial markets performed strongly throughout the year. Major stock markets generally rose and hit record highs during the year, with the U.S. S&P 500 index rising 16% for the year; Hong Kong's stock market benefited from fund inflows with the Hang Seng Index rising 28% for the year. U.S. treasuries also had a decent performance for the year in the environment of Fed rate cuts. In the currency market, the U.S. dollar depreciated by about 9% against other major currencies. Against this backdrop, the Exchange Fund recorded its highest investment income in history in 2025, with positive returns achieved in its stocks, bonds, and 'long-term growth portfolio'. The weakening of the U.S. dollar also led to a revaluation gain in the Exchange Fund's non-Hong Kong dollar assets. It is very special that all major components of the Exchange Fund recorded positive returns, a situation that has only occurred in 2017 and 2020 in the past 15 years. Investments of the Exchange Fund also involve costs and expenses, such as fees paid to fiscal reserves deposits, government funds, and statutory organization deposits, as well as expenses for bills and bond interest and other expenses." Eddie Yue stated: "The unique situation of multiple favorable factors in the global market in 2025 may not necessarily continue in the long term. Looking ahead to 2026, global economic conditions, the monetary policies of major central banks, the development of artificial intelligence, and geopolitical conflicts could all impact the performance of financial markets. If the situation worsens, financial markets may experience significant volatility. Faced with a complex and changing investment environment, the HKMA will continue to adhere to the principle of 'capital preservation first, long-term value enhancement', cautiously and flexibly managing the Exchange Fund. We will make appropriate defensive deployments, maintain high liquidity, and continue to diversify investments, working to enhance the long-term investment return of the Exchange Fund to ensure that it can continue to effectively maintain the monetary and financial stability of Hong Kong."