Taiwan’s Pension Funds Post Disappointing 6.59% Return | Asset owners

Taiwanese pension funds overseen by the Bureau of Labor Funds (BLF) posted a 6.59% return on investment for the first half of 2021 – an improvement over the first quarter, but well below the benchmark .

In comparison, BLF recorded investment gains of NT $ 184.9 billion ($ 6.65 billion) in the first quarter of the year, translating into a return of 4.12%, indicating a performance improvement.

However, returns for the first half of the year were lower than the benchmark Taiwan stock index which rose more than 20%.

Donna Chen,

Key intelligence

“Asset allocation is the key to the fund’s performance. In addition, the Taiwanese government should launch the Membership Choice Platform by allowing retirees to choose the type of investment based on their different spectrum of risk / return appetite, ”said Donna Chen, President of Keystone Intelligence. Asian investor.

She believes such initiatives could ease the pressure on the performance and the financial burden of the Taiwanese government pension fund.

The results showed that the funds were managing a total of NT 4.9 trillion ($ 175.3 billion) at the end of June.

LESS MANDATES

Liu Li-ju, deputy general manager of the Bureau of Labor Funds (BLF), said AsianInvestor in June that the pension fund takes a cautious approach and will slow down its process of appointing new asset managers following its corruption scandal last November, where a former national division chief was found to have manipulated prices stocks with pension money.

Three local investment firms Fuh-Hwa, Uni-President and Capital were found to be linked to the scandal and barred from participating in further national term offers for the next five years.

“The competition is now less fierce for domestic players as there are only 10 players,” Chen said.

BLF had said in February AsianInvestor that he still plans to bid for a domestic investment mandate worth at least NT $ 40 billion and possibly more than an offshore mandate worth up to NT $ 3 billion dollars this year. A spokeswoman confirmed to the media at the end of June that this plan was still under construction and unchanged.

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In October last year, BLF issued a tender for two overseas mandates – a global infrastructure securities mandate of $ 1.64 billion and a global multi-asset portfolio of 2, $ 3 billion, both adopting active strategies. She announced in March the appointment of selected managers, which are the only mandates she has given so far this year.

BLF announced five mandates in 2020, totaling $ 9.7 billion, including $ 6.24 billion for offshore investments.

Source: BLF