Alvin Lang
Jan 28, 2026 08:54
HKMA’s Alternate Fund achieves 8% funding return with report HK$331 billion revenue as international markets rally. Whole belongings attain HK$4.15 trillion.
Hong Kong’s Alternate Fund delivered its highest annual funding revenue on report in 2025, posting HK$331 billion ($42.5 billion) as international fairness markets rallied and the weakening US greenback boosted international foreign money holdings.
The Hong Kong Financial Authority launched unaudited figures on January 28 exhibiting the fund achieved an 8% funding return for the yr. Whole belongings grew HK$70.4 billion to achieve HK$4.15 trillion, with accrued surplus standing at HK$936.1 billion.
The place the Beneficial properties Got here From
Bond holdings led the cost with HK$142.2 billion in positive aspects. Fairness positions added one other HK$108 billion mixed—HK$33.9 billion from Hong Kong shares and HK$74.1 billion from abroad equities. Foreign money translation results contributed HK$38.4 billion because the greenback dropped roughly 9% in opposition to main currencies.
The Funding Portfolio returned 12.4%, whereas the extra conservative Backing Portfolio—which defends the Hong Kong greenback peg—gained 5.2%. The Lengthy-Time period Progress Portfolio has delivered an 11.2% annualized return since its 2009 inception by way of September 2025.
Uncommon Alignment of Constructive Returns
HKMA Chief Government Eddie Yue famous this marks solely the third time in 15 years that each one main fund elements posted optimistic returns concurrently—beforehand occurring in 2017 and 2020. The Cling Seng Index surged 28% in 2025 whereas the S&P 500 gained 16%, with each benchmarks hitting report highs.
“The distinctive confluence of a number of beneficial components within the international monetary markets in 2025 could not final for a very long time,” Yue cautioned. He cited AI funding flows, central financial institution charge cuts, and better-than-expected outcomes from commerce conflicts as key 2025 tailwinds.
Context and Outlook
The Alternate Fund, established in 1935, serves as Hong Kong’s financial protection system—backing banknote issuance and defending the foreign money peg from speculative assaults. The fund’s compounded annual return since 1994 stands at 4.5%, outpacing Hong Kong’s 2.0% inflation charge over the identical interval.
The HKMA not too long ago doubled its RMB Enterprise Facility to RMB200 billion in late January, signaling continued concentrate on yuan-denominated operations alongside its conventional dollar-based actions.
For 2026, Yue warned that geopolitical tensions, central financial institution coverage shifts, and AI market dynamics might set off vital volatility. The authority plans to keep up excessive liquidity ranges and defensive positioning whereas persevering with diversification efforts.
Picture supply: Shutterstock
