Taiwan’s LIF delivers 2.34% return for the first eight months
26 September 2013
News, Global, Taiwan
By Asia Asset Management
Taiwan’s Bureau of Labor Insurance (BLI) announced on September 23 that the Labor Insurance Fund (LIF) realised a year-to-date return of 2.34% for the first eight months of the year, taking the pension fund’s total AUM to NT$489.53 billion (US$16.3 billion) as of August 31.
The performance means LIF managed to meet its mandatory guarantee return, holding at least level with the two-year fixed deposit rate. The fixed deposit rate is currently hovering above 1.2%.
The fund’s growth translates into accumulated revenue of NT$247 billion since LIF’s inception in July 1994.
The fund currently outsources around 30% of its total assets to external fund managers, managing the remaining 70% in-house.
Among the outsourced overseas managers, the global emerging market equity mandate LIF awarded to Vontobel in October 2012 displayed total accumulated losses of 9.6%, to around US$280 million, underperforming its benchmark index FTSE AW Emerging Markets ex-Taiwan at negative 7.56%.
The passive global debt mandates LIF outsourced to State Street Global Advisors (SSgA) and Vanguard suffered respective accumulated losses of 6.92% and 6.88% during the same period. That compared to the loss of 6.77% for the mandates’ benchmark index, the Barclays Capital Global Treasury Index.
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