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Taiwan’s BLF funds extend rebound but warns of “challenging” market outlook

By Hui Ching-hoo   
November 5, 2021

Taiwan pension funds overseen by the Bureau of Labor Funds (BLF) reported NT$289.2 billion (US$10.33 billion) of total investment income in the nine months to September, extending a rebound that began in November 2020 following losses when markets were hit by the coronavirus crisis last year.

Average investment return of the eight pension and annuity funds was 5.75% versus a 5.22% loss in January-September 2020, BLF says in a statement on November 2. The funds had incurred total investment loss of NT$240.1 billion in the first nine months of 2020.

Their assets as of September 2021 was NT$5.46 trillion, up 16.42% from NT$4.69 trillion a year ago.

“Although its funds’ investments were buoyed by the global market recovery from the coronavirus pandemic, the market outlook remains challenging,” BLF says, noting that the US Federal Reserve’s plan to taper bond purchases, the debt woes of China Evergrande Group, and power shortages in China, have triggered volatility in global bond and equity markets.

Evergrande Group is the world’s most indebted company with over $300 billion in liabilities. Investors are concerned that the property developer may default on its bond coupon payments.

The Labor Retirement Fund, Taiwan’s largest defined-benefit retirement plan, was the best performer among the BLF funds with an investment return of 6.71% compared to a 6.59% loss in the first nine months of 2020.

The National Pension Insurance Fund had the second-best return of 6.26% versus a 4.37% loss last year.