WEDNESDAY, MARCH 8, 1989
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TRUST FUNDS ACHIEVE REMARKABLE GROWTH
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STATUTORY TRUST FUNDS HAD ACHIEVED REMARKABLE GROWTH DESPITE FOUR PREVIOUS STOCK MARKET FALLS.
THE SECRETARY FOR DISTRICT ADMINISTRATION, THE HON DONALD LIAO, INFORMED THE LEGISLATIVE COUNCIL OF THIS TODAY (WEDNESDAY) IN A WRITTEN REPLY TO A QUESTION FROM THE HON ROSANNA TAM.
MR LIAO SAID THE INVESTMENT POLICY FOR THE TRUST FUNDS AND THE JUDICIOUS ADMINISTRATION OF THE FUNDS BY STATUTORY COMMITTEES PROVIDED THE BEST SAFEGUARD AGAINST UNDUE SPECULATION AND IMPROPER INVESTMENT.
THE OPERATION OF THE EIGHT STATUTORY TRUST FUNDS UNDER THE TRUSTEESHIP OF THE SECRETARY FOR DISTRICT ADMINISTRATION INCORPORATED WAS OVERSEEN BY THE STATUTORY COMMITTEES WHICH MADE DECISIONS ON INVESTMENT MATTERS, HE SAID.
FUNDS
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THE INVESTMENTS OF TWO OF THE
SIR MURRAY MACLEHOSE TRUST FUND AND THE SIR EDWARD YOUDE MEMORIAL FUND, WERE HANDLED BY FINANCIAL INSTITUTIONS UNDER THE GUIDANCE OF THE STATUTORY COMMITTEES CONCERNED.
THE PERFORMANCE OF THE FINANCIAL INSTITUTIONS WAS MONITORED CLOSELY BY THE COMMITTEES WHICH ISSUED INSTRUCTIONS TO THEM FROM TIME TO TIME.
AS FOR THE OTHER TRUST FUNDS, THE INVESTMENT PORTFOLIOS WERE ADMINISTERED IN ACCORDANCE WITH THE ADVICE OF THE STATUTORY COMMITTEES AND CHANGES WERE MADE WHEN NECESSARY UPON PERIODICAL REVIEWS.
MR LIAO SAID ALL THE TRUST FUNDS OPERATED ON THE BASIS THAT ONLY THEIR RECURRENT INCOME WAS USED FOR THEIR RESPECTIVE PURPOSES IN ORDER TO PRESERVE THEIR CAPITAL FOR POSTERITY,
EACH FUND MAINTAINED A BALANCED COMPRISING EQUITIES, BONDS AND BANK DEPOSITS.
INVESTMENT PORTFOLIO
WHILST BONDS AND BANK DEPOSITS WERE LESS SUSCEPTIBLE TO MARKET PRICE FLUCTUATIONS, THEY GENERALLY DID NOT APPRECIATE IN CAPITAL VALUE.
INCOME FROM THESE INVESTMENTS REMAINED BROADLY THE SAME IN MONETARY TERMS YEAR AFTER YEAR, AND ITS PURCHASING POWER WAS LIKELY TO BE ERODED BY INFLATION.
A SUITABLE PROPORTION OF EACH PORTFOLIO WAS THUS INVESTED IN QUALITY EQUITIES OF PROVEN TRACK RECORDS AND GOOD PROSPECTS ACHIEVE LONG-TERM GROWTH IN BOTH CAPITAL AND INCOME, MR LIAO SAID.
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