Investment Objective

To provide competitive overall rates of return for members who want to have a stable return. Invests mainly in Permitted Deposits, Debt Securities issued by any government, central bank or multilateral international agency. Invests in any region such as North America, Europe, United Kingdom and Asia

Fund Details

Latest Fund Expense Ratio: 1.28%

Launch Date(dd/mm/yyyy): 01/12/2000

Unit Price: HKD 16.871

Fund Size: HKD 4,954.8M

Fund Commentary

Fading geopolitical and trade tensions, central bank liquidity and better primary data out the world’s two biggest economies drove a positive tone to start the new year. However, the COVID-19 outbreak transformed from a perceived local problem in China to a more global shock as the virus spread regionally in Asia. By March, the expansion of COVID-19 to the west and the ignition of an oil price war between Saudi Arabia and Russia were met with investor fear, along with the seizing up of liquidity in capital markets, which forced governments and central banks to take extraordinary action. Central banks responded swiftly in a pre-emptive effort to minimize the damage to the global economy, reducing interest rates, announcing significant new waves of quantitative easing (QE) and introducing various lending programmes. The US Federal Reserve Board (Fed) led the charge at a scale not seen since 2008. The Federal Open Market Committee (FOMC) surprised the market with a 100 basis point interest rate reduction on March 15, bringing the target range to 0%- 0.25%. The FOMC also announced a large restart of asset purchases, re-opened US dollar swap lines with most central banks to help limit the impact from the ongoing US dollar squeeze and reestablished liquidity facilities to further support credit markets. Across the G10, the European Central Bank, Bank of England, Reserve Bank of New Zealand, Norges Bank and Bank of Canada all announced or increased their asset purchase programmes, while the Bank of Japan announced it was doubling the scale of its purchases of exchange-traded funds and real estate investment trusts while increasing slightly its purchases of corporate bonds and commercial paper. The significant central bank response, in terms of monetary and liquidity policies, along with fiscal loosening helped support risk assets and we saw a partial recovery in valuations at the end of the period. Spreads on investment-grade and high-yield corporate bonds widened over the period, while high-quality interest rates in developed markets fell sharply. The US dollar appreciated, as the US Dollar Index, an average of the US dollar against the major world currencies, strengthened by approximately 2.8%.

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