Taiwan’s Labor Pension Fund grows 1.37% in May

05 July 2013   Category: News, Global, Taiwan   By Hui Ching-hoo

Taiwan’s largest pension fund, the Labor Pension Fund (LPF), saw total AUM grow 1.37% in May to reach NT$1.57 trillion (US$52.3 billion), despite the Taiwan Stock Exchange Weighted Index falling 2.33%.
The Labor Pension Fund Supervisory Committee (LPFSC) said on its website that the fund realised revenue of NT$50.3 billion for the first five months of this year, translating into an annualised return of 3.35%.
The LPF’s New Scheme, the defined contribution scheme, reported returns of 3.39% during the period, leading to total AUM of NT$971.2 billion, as of the end of May. The scheme outsourced NT$480.7 billion or 49.5% of its asset to external managers, delivering an average return of 5.92%.
Among the externally managed funds, the total US$250 million global minimum volatility equity indexing mandates outsourced between BlackRock and State Street Global Advisors (April 18) suffered an average loss of 1.74%.
The $1.2 billion in global emerging market debt mandates outsourced to Ashmore, Bluebay, Stone Harbour, and Pictet, in July 2012, recorded an average return of 1.5%, versus a 2.33% return for the benchmark index.
In April, the LPF took back half of the US$250 million mandate it awarded to Legg Mason in 2010 following a performance review.
Meanwhile, the LPF’s defined benefit scheme (the Old Scheme) recorded a return of 3.3% from January to May to NT$595.2 billion.
The LPFSC notes that although returns significantly outperformed the fund’s minimum guaranteed level of returns, the drawing down of quantitative easing in the US may cast uncertainties over global capital markets.