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Taiwan's BLF names managers for NT$64 billion domestic absolute return mandate

April 3, 2020

Taiwan’s Bureau of Labor Funds (BLF), which supervises the island’s employee pensions, has appointed eight managers, including local units of foreign firms, for a NT$64 billion (US$2.11 billion) domestic absolute return mandate.

They are Taishin Securities Investment Trust Co, Capital Investment Trust Corp, Cathay Securities Investment Trust Co, Nomura Asset Management Taiwan, Fuh Hwa Securities Investment Trust Co, Prudential Financial Securities Investment Trust Enterprise, Uni-President Asset Management Corporation, and Allianz Global Investors Taiwan.

The appointments are for five years and each firm will manage NT$8 billion, the BLF says in a statement on April 1.

The scope of investment includes Taiwanese stocks traded on the domestic exchange and over-the-counter market, local equity exchange-traded funds, and domestic corporate and government bonds.

This is the BLF’s third domestic absolute return mandate in as many years.

But the pension supervisor will likely become more conservative in issuing new mandates this year as the global economy is hit by the coronavirus pandemic, according to a Taipei-based fund analyst.

“Like many major asset owners, BLF is expected to adopt a more defensive asset allocation approach. They’re likely to review their existing manager line-up instead of further diversifying their portfolios, particularly in the passive investing areas,” the analyst tells Asia Asset Management, speaking on condition of anonymity.

The BLF had around NT$4.6 trillion of assets under management at the end of 2019.