Taiwan’s LIF displayed a return of 1.79% for the first half
24 July 2013
News, Global, Taiwan
By Hui Ching-hoo
Taiwan’s Labor Insurance Fund (LIF) failed to catch advances on the local stock exchange, securing returns of just 1.79% for the first half this year compared to growth of 3.6% on the Taiwan Capitalization Weighted Stock Index (TCWSI).
The LIF had total AUM of NT$482 billion (US$16 billion) as of the end of June, with 58.48% of the assets allocated to the domestic market.
Regarding the fund’s domestically outsourced mandates; the NT$4 billion mandate awarded to Uni-President in March 2012 recorded an accumulated advance of 4.9% to NT$4.17 billion, against a return of 8.8% for its benchmark index.
Another NT$4 billion domestic mandate dished out to Cathay in September 2011 has advanced 16.65% since inception, outperforming its benchmark’s 12.27%.
Although the LIF lagged far behind the stock market in the first half, the fund managed to achieve its mandatory investment target in outperforming the 2-year fixed savings rate.
Tsai Chung-chun, vice chairman of Bureau of Labor Insurance told Asia Asset Management in an earlier interview that: “The overall investment target of the LIF is to balance mid-to-low risk investments whilst generating reasonable returns. Taking into consideration the continuous funding requirements of the benefits that the LIF offers, the first priority is to maintain sufficient liquidity.”
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