Taiwan’s offshore funds suffer strong redemptions in June
16 August 2013
News, Asia, Taiwan
By Asia Asset Management
Taiwan’s offshore funds suffered a capital exodus in June amid volatile global markets, taking total AUM down 10% to an eight-month low of NT$2.59 trillion (US$86.3 billion), as of the end of June, according to figures from the Securities Investment Trust & Consulting Association (SITCA).
Among the offshore funds, equity funds and high-yield (HY) bond funds suffered the largest redemptions, with capital outflows at NT$86.2 billion and NT$78.1 billion, respectively.
Offshore HY bond funds were among the most favoured assets for Taiwanese investors during the previous three years. The asset class saw total AUM top NT$850 billion in May, an increase of 70% compared to NT$500 billion at the end of 2011. However, plans to draw down quantitative easing (QE) unveiled by the US Fed in May sparked a sharp reversal of fund flows in the following month.
Against that backdrop, many investors reallocated their assets from offshore HY bond and equity funds to offshore money market and plain vanilla fixed income funds.
Plain vanilla fixed income funds recorded net capital inflows of NT$11.4 billion for the first half while, money market funds reported net capital inflows of NT$14.2 billion.
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