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September 2023
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September 2023
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Taiwan’s BLF funds post investment gain in first four months of 2023

By Hui Ching-hoo   
June 7, 2023

Taiwan pension funds overseen by the Bureau of Labor Funds posted an investment gain of NT$287 billion (US$9.33 billion) in the first four months of the year as markets stabilised after the banking sector crisis in the US and Europe.

Their return for the four-month period was 4.88%, and the average ten-year annual investment return as of April was 4.56%, the pension supervisor says in a statement on June 2.

The eight BLF funds have reported a gain in every month since January, marking a turnaround from last year when global markets were dragged down by the war in Ukraine and China’s zero-Covid policy. The funds lost NT$215 billion in the first four months of 2022 and NT$382 billion for the full year.

This year, the collapse of US regional lenders Silicon Valley Bank and Signature Bank and Credit Suisse in Switzerland threatened global markets, prompting regulators to move swiftly to avert the crisis.

The BLF notes that global markets had stabilised after the volatility caused by the banks’ collapse, and that the US Federal Reserve’s rate hike cycle appears to be coming to an end, which is “expected to be beneficial to risky assets”.

According to the BLF, it will stay focused on managing the pension funds’ portfolios from a long-term and stable investment perspective. “BLF will continue to diversify its investments across bonds, equities and alternatives in domestic and overseas markets to mitigate market volatility risks.”

The Labor Insurance Fund was the best performer in the first four months of the year with an investment return of 5.83%, followed by the Labor Retirement Fund with 5.74%.

The eight funds had NT$6.22 trillion of combined assets as of end-April, up 6.32% from NT$5.85 trillion a year ago.