Taiwan’s pension and annuity funds overseen by the Bureau of Labor Funds earned a record investment income of NT$719.4 billion (US$23 billion) last year with nearly half the amount coming from domestic equities as the Taiwanese stock market staged a technology-driven rally.
The average return for the eight funds rebounded to 12.8% from minus 6.71% in 2022 when global stock and bond markets were roiled as central banks began raising interest rates to tame skyrocketing inflation.
According to BLF Deputy Director General Li-Ju Liu, around 46% of income last year, or NT$330.9 billion, came from the funds’ investments in domestic stocks.
Taiwan’s benchmark stock index jumped 26.7% in 2023, the second largest gain in history as prices of tech stocks such as chipmaker Taiwan Semiconductor Manufacturing Co surged.
“BLF closely monitored the financial market trend. It reviewed and rebalanced portfolio allocation in a timely manner. We successfully mitigated downside risks when the global financial market was on a bear run,” Liu says in a statement on February 1.
According to Liu, the global market outlook remains unclear, citing uncertainties such as when central banks will end their monetary tightening cycle. She says the BLF will stay focused on strengthening investment efficiency to improve long-term investment returns.
The Labor Retirement Fund, Taiwan’s largest defined-benefit scheme, was the best performing BLF fund with a return of 14.83%. The Labor Insurance Fund was second with a return of 14.44%.
The annualised return of the eight funds for the ten years to December 2023 was 5.2%.
The funds had NT$6.56 trillion of combined assets at the end of last year, up 9.5% from NT$5.99 trillion in 2022.
