There is an abundance of evidence to suggest that over the long term an appropriately diversified portfolio, comprising bonds and equities, could yield significantly higher real returns than one of purely fixed income assets. Since the HSF Act was approved, much has been done to prepare for its active implementation.
Pending the appointment of the HSF Board and its instructions with respect to the investment of the portfolio, the Ministry of Finance authorized the maintenance of the Fund “in accordance with the Investment Guidelines and Procedures used in respect of the Interim Stabilization Fund”. This meant maintaining the Fund in US dollar short term deposits, in institutions with high credit ratings.