As a result of the market operations by the Hong Kong SAR Government in August 1998, the Exchange Fund acquired a substantial portfolio of shares of the 33 constituent companies of the Hang Seng Index (HSI). This portfolio, combined with the Hong Kong equity portfolio transferred from the Land Fund to the Exchange Fund (transferred in November 1998), had a market value of approximately HK$198 billion on 20th October 1999.

Exchange Fund Investment Limited (EFIL) was established in October 1998 to provide investment advice to the Financial Secretary on Hong Kong in relation to the Exchange Fund's Hong Kong equity portfolio. As part of its mandate, EFIL was responsible for advising the Financial Secretary and the HKMA on the disposal of this portfolio in an orderly manner. (A portion approximately equal in value to 5% of the Exchange Fund was retained for the purpose of long-term investment.) The initial method of disposal chosen by EFIL, and agreed by the Financial Secretary, was through Tracker Fund of Hong Kong (TraHK).

On 12th November 1999, TraHK was listed on the Stock Exchange of Hong Kong. With an issue size of HK$33.3 billion (approximately US$ 4.3 billion), TraHK's IPO was the largest IPO ever in Asia ex-Japan. Since the IPO, an additional HK$86 billion in Hang Seng Index constituent stocks has been returned to the market through TraHK's unique tap mechanism.

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