Investment Objective
The constituent fund aims to provide a return higher than retail Hong Kong dollar savings deposit rate in Hong Kong 2 .
Fund Details
Latest Fund Expense Ratio: 1.01%
Launch Date(dd/mm/yyyy): 01/12/2000
Unit Price: HKD 11.50
Fund Size: HKD 578.53M
Fund Commentary
Risk assets came under acute stress as markets digested fall out from Coronavirus (COVID-19) lockdowns while policy makers rushed to contain the damage. HK govt announced a total HK$257bn (9.5% of HK GDP) fiscal package to support the economy. Overall monetary conditions were stable with some tightening bias in March; monetary base increased by HK$18bn to HK$1681bn while Aggregate balance was at HK$54bn. 3-month HIBOR finished the quarter at 1.93% (-49bps) and 1-year HIBOR at 1.94% (-50bps) as Fed delivered 150bps cuts in 1Q20 while HKMA cut bank reserve requirements and reduced exchange bill issuance to support liquidity. HK yields were down following global yields as markets rushed to safe haven assets on global recession concerns. 1-year HK Government bond yield ended at 0.59% (-118 bps), 5yr at 0.60% (-114bps) and 10yr at 0.72% (-107bps). Curve bull steepened slightly and US yields outperformed HK yields. 5yr HK$IRS (interest rate swaps) and 10yr HK$IRS were down by 96 bps and 97 bps respectively to 1.02% and 1.08%. Markit’s HK Bond Index returned 5.0% in 1Q20 bringing last 12m returns to 6.5%. Due to low interest rates, gross fund returns remain low. Our strategy of generating returns in excess of 3-month HIBOR continues to do well. Global economic data expected to remain weak as global recession looms on COVID-19. FED delivered a 150-bps emergency cut and announced large scale QE to buy assets including corporate bonds while US announced a fiscal package of US$ 2trn. ECB announced additional QE and BOJ continue to pursue accommodative policies with willingness to do more if required. COVID-19 brought global economic activity to a halt which will keep markets volatility higher in near term. Lower HK rates will weigh on incremental return from reinvestments. HKMA will continue to pursue measures to support bank lending and liquidity. However, fragile HK political situation may continue to take toll on the sentiments keeping outflows from HK high.
Fund Performance Information
| Annualised return |
Calendar year return |
1 year
(p.a. %) |
5 years
(p.a. %) |
10 years
(p.a. %) |
Since launch
(p.a. %) |
2015 | 2016 | 2017 | 2018 | 2019 | YTD |
| 1.41% |
0.62% |
0.30% |
0.73% |
0.09 | 0.04 | 0.48 | 0.86 | 1.33 | N/A |
Fund Performance Information
| Annualised return |
1 year
(p.a. %) |
5 years
(p.a. %) |
Since launch
(p.a. %) |
| 1.41% |
0.62% |
0.73% |
| Calendar year return |
| 2015 | 2016 | 2017 | 2018 | 2019 | YTD |
| 0.09 | 0.04 | 0.48 | 0.86 | 1.33 | N/A |
Top 10 Holdings
| Security name |
Holdings Weight |
| ICBC ASIA 3 06/21/2020 |
6.65% |
| CMB WING LUNG 2 07/23/2020 |
6.00% |
| AGRICULTURAL BK CHINA/HK 2.35 12/16/2020 |
4.97% |
| TERM DEPOSIT 29,000,000.00 HKD BANK OF CHINA HKG 2.1 04/02/2020 |
4.87% |
| HANG SENG BAN 2.105 05/07/2020 |
4.78% |
| BOC HK 2.45 04/17/2021 |
4.60% |
| CENTURY BRIGH 3.15 10/31/2020 |
4.03% |
| TERM DEPOSIT 22,555,225.75 HKD SUMITOMO MITSUI BANKING CORP 2.34 06/17/2020 |
3.78% |
| TERM DEPOSIT 20,681,600.00 HKD MIZUHO BANK LTD. HONG KONG BRANCH 2.41 07/02/2020 |
3.46% |
| HKMC 2.04 09/24/2020 |
3.33% |
| Total |
46.47% |
Top 10 Holdings
Security name
Holdings Weight |
| ICBC ASIA 3 06/21/2020
Holding Weight 6.65%
|
| CMB WING LUNG 2 07/23/2020
Holding Weight 6.00%
|
| AGRICULTURAL BK CHINA/HK 2.35 12/16/2020
Holding Weight 4.97%
|
| TERM DEPOSIT 29,000,000.00 HKD BANK OF CHINA HKG 2.1 04/02/2020
Holding Weight 4.87%
|
| HANG SENG BAN 2.105 05/07/2020
Holding Weight 4.78%
|
| BOC HK 2.45 04/17/2021
Holding Weight 4.60%
|
| CENTURY BRIGH 3.15 10/31/2020
Holding Weight 4.03%
|
| TERM DEPOSIT 22,555,225.75 HKD SUMITOMO MITSUI BANKING CORP 2.34 06/17/2020
Holding Weight 3.78%
|
| TERM DEPOSIT 20,681,600.00 HKD MIZUHO BANK LTD. HONG KONG BRANCH 2.41 07/02/2020
Holding Weight 3.46%
|
| HKMC 2.04 09/24/2020
Holding Weight 3.33%
|
| Total: 46.47% |
Portfolio Allocation
- • 63.11 Bond
- • 36.89 Cash & Short-term Investments (e.g. bills and deposits)
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