Taiwan’s SITCA says fund flows remain firm post scandal
04 December 2012
By Hui Ching-hoo
Taiwan’s Securities Investment Trust & Consulting Association (SITCA) says the fallout from a recent stock manipulation scandal on the island’s fund industry has been marginal, noting that the debacle has not triggered a capital exodus.
Although the fund industry has displayed a capital outflow for three consecutive months, since August, SITCA considers the extent of the fund redemptions to be marginal. The redemption ratio stood at 0.64% in October and fell further to 0.40% in November when the scandal broke out.
The scandal came under the spotlight in early November as allegations emerged that former ING Securities Investment and Trust management employees were making significant profits by manipulating stock prices with assets it managed for the Labor Pension Fund (LPF) and Labor Insurance Fund (LIF).
The association has urged investors not to take a bias view of local fund managers, noting that the scandal was an exceptional case. Taiwanese fund managers have delivered better-than-average investment results year-to-date. For example, 192 local equities funds recorded an average return of 6.05% year-on-year, against an increase of 1.33% for the Taiwan Stock Exchange Weighted Index.
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