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April 2024
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Taiwan’s BLF funds post lower investment gain amid uncertainty about US rates

BLF
By Hui Ching-hoo   
March 5, 2024

Taiwan pension funds overseen by the Bureau of Labor Funds (BLF) kicked off the year with an investment gain of NT$76.38 billion (US$2.42 billion) in January, half the level of a year ago as uncertainty about US rate cuts and the slowdown in China overshadowed markets.

The average return of the eight funds dropped to 1.3% from 2.8% in January 2023 when their investment gain was NT$150.7 billion as Taiwan’s stock market benchmark rebounded nearly 20% from Covid-19 declines.

Assets under management of the eight pension and annuity funds as of January 31 were NT$6.17 trillion.

Although US consumer confidence and manufacturing industry sentiment have improved, the BLF pointed out that China’s economic slowdown and the absence of a rate cut thus far by the US Federal Reserve has cast uncertainty over global financial markets.

“The timing for central banks to cut rates remains unclear. This, together with geopolitical tension such as the impact of the Red Sea shipping crisis on the global supply chain, is bringing turmoil to financial markets,” the BLF says in a statement on March 2 announcing the January numbers.

The BLF says it is keeping close watch on global economic and political trends, adding that it reviews strategic allocation, expands pension pools and adjusts portfolio allocation on a dynamic basis to optimise investment efficiency of the funds.

The Labor Pension Fund, Taiwan’s largest defined-contribution scheme, was the best performing fund in January with a return of 1.37%, followed by the Labor Retirement Fund with 1.32%.