Taiwan’s LIF delivers 2.34% return for the first eight months

26 September 2013   Category: 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.