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Taiwan’s PSPF investment income soars on stock market bull run

PSPF
By Hui Ching-hoo   
September 29, 2021

Taiwan’s Public Service Pension Fund (PSPF) reported a roughly 600% year-on-year surge in investment income in the first seven months of 2021 on the back of the local stock market bull run led by chip manufacturers.

The pension fund’s investment income in January through July was NT$56.89 billion (US$2.05 billion) versus NT$8.38 billion in the first seven months of 2020, and its return jumped to 8.52% from 1.45% last year.

“The coronavirus impact on Taiwan equities has been marginal thus far this year. Taiwan’s stock market has performed better than most emerging-market equities,” PSPF says in a statement on September 27. “The fund rebalanced its portfolio accordingly based on the market trend.”

Taiwan’s main stock index was up 15.7% in January through July, driven by the robust chip manufacturing and foundry industries.

Taiwan dominates the world semiconductor industry. Taiwan Semiconductor Manufacturing Co, the island’s largest chip maker, accounted for 54% of total global foundry revenue in 2020.

PSPF says it will “put more focus on multi-asset and international market strategies in the face of the increasingly complicated market environment”.

Average return from the pension fund’s external asset managers in the seven months to July was 11.13%, matching the return from its internally-managed equity portfolio. The return from its internally managed bond portfolio was only 0.49%.

The fund had around NT$717.23 billion of investable assets in July, up from NT$609.76 billion a year ago.

The PSPF is a mandatory defined-benefit pension plan for civil servants, teachers, and military personnel.