Taiwan’s Bureau of Labor Funds (BLF) announced that the Labor Pension Fund’s (LPF) overall performance for the first ten months of 2014 has already hit its whole-year target, racking up a total net profit of NT$110.3 billion (US$3.67 billion).
Liu Li-Ju, deputy director general of the BLF, said that the LPF’s monthly profit was NT$17.5 billion for October, which boosted the pension fund’s total AUM to as much as NT$2.59 trillion as of the end of that month. Its year-to-date return was 4.59%, against 3.85% at the end of September.
She added that total year-to-date net profit would be NT$118.8 billion with the inclusion of the National Pension Fund (NPF). The BLF is also commissioned by the Ministry of Health and Wealth to manage the NPF.
“Despite the volatile market condition stemming from Asian currencies’ depreciation and the faltering Japanese and European economies this year, the BLF continues to pursue a stable investment strategy. Through the year, the LPF managed to outperform Taiwan’s stock market,” Ms. Liu added.
She went on to say that equity has been the outperforming asset class in the LPF’s portfolio. Overseas and domestic equities currently constitute 16.56% and 23.45% of its total AUM, respectively.
For example, the Asian Pacific equities mandate awarded to Invesco by the LPF’s defined benefit (DB) Old Scheme in November 2013 secured an accumulated return of 9.63%, against 5.91% for its benchmark index.
Chao-Hsi Huang, director general of the BLF, earlier noted that the LPF would scale up its allocation to foreign markets from its current 40% to around 48% next year. The fund will also increase its exposure to alternative assets, including REITs and infrastructure, so as to diversify market risk.
