Investment Objective
The constituent fund aims to achieve a return in line with the ‘prescribed savings rate' (i.e. broadly the average rate of interest on a Hong Kong dollar savings account) published by the Authority.
Fund Details
Latest Fund Expense Ratio: 1.13%
Launch Date(dd/mm/yyyy): 01/12/2000
Unit Price: HKD 11.08
Fund Size: HKD 1,451.03M
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 |
| 1.19% |
0.38% |
0.19% |
0.53% |
0.00 | 0.03 | 0.01 | 0.49 | 1.10 | N/A |
Fund Performance Information
| Annualised return |
1 year
(p.a. %) |
5 years
(p.a. %) |
Since launch
(p.a. %) |
| 1.19% |
0.38% |
0.53% |
| Calendar year return |
| 2015 | 2016 | 2017 | 2018 | 2019 | YTD |
| 0.00 | 0.03 | 0.01 | 0.49 | 1.10 | N/A |
Top 10 Holdings
| Security name |
Holdings Weight |
| TERM DEPOSIT 90,000,000.00 HKD OVERSEAS CHINESE BANKING CORP HONGKONG 1.94 06/29/2020 |
4.88% |
| TERM DEPOSIT 86,800,000.00 HKD UNITED OVERSEAS BANK HKG 2.42 05/05/2020 |
4.73% |
| HANG SENG BAN 2.28 04/15/2020 |
4.47% |
| BK OF EAST ASIA BNKEA 0 05/21/2020 |
3.84% |
| TERM DEPOSIT 70,054,905.84 HKD SUMITOMO MITSUI TRUST BANK LTD, HK 2.2 04/23/2020 |
3.82% |
| TERM DEPOSIT 68,547,937.14 HKD CHINA CONSTRUCTION BANK HKG 2.38 04/29/2020 |
3.73% |
| TERM DEPOSIT 52,042,310.39 HKD MIZUHO BANK LTD. HONG KONG BRANCH 2.24 05/27/2020 |
2.83% |
| TERM DEPOSIT 50,004,109.59 HKD BNP PARIBAS HKG 1 04/02/2020 |
2.71% |
| TERM DEPOSIT 43,274,980.97 HKD MUFG BANK, LTD. 2.18 04/23/2020 |
2.36% |
| TERM DEPOSIT 42,021,745.70 HKD OCBC WING HANG BANK LIMITED 1.8 06/03/2020 |
2.28% |
| Total |
35.65% |
Top 10 Holdings
Security name
Holdings Weight |
| TERM DEPOSIT 90,000,000.00 HKD OVERSEAS CHINESE BANKING CORP HONGKONG 1.94 06/29/2020
Holding Weight 4.88%
|
| TERM DEPOSIT 86,800,000.00 HKD UNITED OVERSEAS BANK HKG 2.42 05/05/2020
Holding Weight 4.73%
|
| HANG SENG BAN 2.28 04/15/2020
Holding Weight 4.47%
|
| BK OF EAST ASIA BNKEA 0 05/21/2020
Holding Weight 3.84%
|
| TERM DEPOSIT 70,054,905.84 HKD SUMITOMO MITSUI TRUST BANK LTD, HK 2.2 04/23/2020
Holding Weight 3.82%
|
| TERM DEPOSIT 68,547,937.14 HKD CHINA CONSTRUCTION BANK HKG 2.38 04/29/2020
Holding Weight 3.73%
|
| TERM DEPOSIT 52,042,310.39 HKD MIZUHO BANK LTD. HONG KONG BRANCH 2.24 05/27/2020
Holding Weight 2.83%
|
| TERM DEPOSIT 50,004,109.59 HKD BNP PARIBAS HKG 1 04/02/2020
Holding Weight 2.71%
|
| TERM DEPOSIT 43,274,980.97 HKD MUFG BANK, LTD. 2.18 04/23/2020
Holding Weight 2.36%
|
| TERM DEPOSIT 42,021,745.70 HKD OCBC WING HANG BANK LIMITED 1.8 06/03/2020
Holding Weight 2.28%
|
| Total: 35.65% |
Portfolio Allocation
- • 25.17 Bond
- • 74.83 Cash & Short-term Investments (e.g. bills and deposits)
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