PSPF notched up 43.5% growth in income

05 February 2014   Category: News, Asia, Global, Taiwan   By Hui Ching-hoo

Taiwan’s Public Service Pension Fund (PSPF) reported an income of NT$42.7 billion (US$1.42 billion) last year, taking its total AUM to an all-time high of about  NT$562.4 billion as of the end of 2013, according to a report from Commercial Times.  

Income from its investments expanded by 43.5% from NT$29.7 billion in the previous year, translating into an annualised return of 8.3%. 

The pension fund attributed the stellar results to the steady performance and risk control of its outsourced managers as well as from its asset allocation strategy.

“If the outsourced managers fall short of the benchmark and failed to improve their performance, the pension fund will terminate their mandates immediately,” the pension committee said.

Last year, PSPF took back a total of NT$19 billion in funding from a number of domestic managers including Fubon and Capital as they failed to meet the set criteria. Over the previous five years, the pension fund withdrew an aggregate of NT$43 billion of assets from ten below par domestic managers’ accounts.     

Looking ahead, the pension fund will earmark NT$90 billion to invest in equities this year. Of this, NT$55 billion will be placed in Taiwanese equities. It will also differentiate its equity mandates to global fundamental index and global risk index so as to bolster the fund’s return.

A  PSPF spokesperson told Asia Asset Management that the pension fund has yet to put together concrete details and a time frame for the new global mandates.

“We’re still in the process of handling the applications for the global minimum volatility indexed equity (ex Taiwan) and global high dividend yield enhanced equity(ex Taiwan) we tendered in December last year. The results are due to be announced in the end of first quarter,” he adds.