The Hong Kong Exchange Fund recorded an investment income of HK$219 billion ($28.13 billion) in 2024, with an investment return rate of 5.3 percent, the Hong Kong Monetary Authority said on Monday.

Income from Hong Kong equities saw a significant turnaround, gaining HK$21.8 billion compared with a loss of HK$15.5 billion in the previous year. Gains on bond investments, the main contributor last year, decreased slightly by 6 percent to HK$135.6 billion.

However, the appreciation of the US dollar relative to other major currencies led to a negative currency translation effect on non-Hong Kong dollar assets.

Throughout the year, the total assets of the Hong Kong Exchange Fund increased by HK$65.9 billion, from HK$4.016 trillion at the end of 2023 to HK$4.082 trillion at the end of 2024, with an accumulated surplus of HK$731.6 billion.

“The Exchange Fund achieved a decent investment income,” HKMA Chief Executive Eddie Yue Wai-man said.

He said global financial markets performed broadly well in 2024, as major economies recorded stable growth, inflation eased closer to policy targets, and major central banks progressively lowered their policy rates.

Looking ahead to 2025, he said the global financial markets’ outlook remains uncertain, with a continued focus on interest rate policies.

According to projections in December, the US Federal Reserve forecast a total of half a percentage point of rate cuts in 2025.

He also said that any escalation in trade friction among major economies or geopolitical situation could affect real economic activities, and may also trigger volatility in the financial markets.

Facing these challenges and uncertainties, the HKMA will continue to diversify its investments to strive for higher long-term returns, ensuring that the Exchange Fund remains effective in achieving its purpose of maintaining the monetary and financial stability of Hong Kong, Yue added.

Contact the writer at thor_wu@chinadailyhk.com