HKIFA sees no immediate need for MPF to cut US bonds

The Hong Kong Investment Funds Association (HKIFA) said Mandatory Provident Fund (MPF) trustees are not required to reduce their holdings of US bonds despite Moody’s recent downgrade of the US credit rating to AA+. The assurance comes as Japan’s Rating and Investment Information (R&I) agency continues to assign the US its highest AAA rating, preserving its eligibility as a top-tier investment under MPF rules. HKIFA officials said industry stakeholders are studying the situation and that any potential fund switching would be carried out under existing regulations. The MPF system remains in compliance with regulatory requirements, and trustees are coordinating with fund managers to assess risks. Japan remains the largest foreign holder of US Treasuries, with holdings of USD1.13tr in March.