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Taiwan BLF pensions post 9.62% return in January through October

By Asia Asset Management  
Dec 4, 2019

Taiwan’s labour pension funds posted an average investment return of 9.62% in January through October, recovering from a 0.47% loss in the same period last year as global stock market rallied and major central banks cut interest rates, according to the Bureau of Labor Funds (BLF).

Nevertheless, the BLF, which supervises six labour funds and one annuity fund, says it will remain prudent on asset allocation strategy amid market uncertainties, including the US-China trade war and Brexit.

The seven funds it oversees reported total profits of NT$383.9 billion (US$12.5 billion) in the ten months through October, rebounding from a NT$17.45 billion loss in January-October 2018, the BLF says in a statement on December 2.

The profits translate into an annualised return of 9.62% compared to a loss of 0.47% in the year-ago period.

The Labor Retirement Fund, Taiwan’s largest defined-benefit retirement plan, recorded the highest return at 11.1%, followed by the Labor Insurance Fund and Labor Pension Fund with returns of 10.65% and 9.32%, respectively.

Although global economic indicators remained weak in October, the accommodative monetary policies of major central banks continues to drive capital into stock markets, Liu Li-ju, deputy director general of BLF, says in the statement.

She notes that this, together with a de-escalation of global trade tensions, drove up the Taiwan and global stock markets in October.

Ms. Liu says the BLF “will continue to closely monitor the changing market condition including the progress of US-China trade negotiation, development of Brexit and geopolitical risks. It will adjust its asset allocation strategy prudently in order to generate stable long-term profits for its members”.

The BLF had around of NT$4.6 trillion of assets under management at the end of October.