Fixed income assets nearly double in Taiwan

Data

Taiwan investors poured $2.2bn into renminbi bonds last year and fixed income products accounted for 80% of net inflows, according to data from Morningstar Direct.

Investors in Taiwan poured NT$342bn ($11.11bn) into Taiwan-domiciled fixed income funds last year ending November. In total, funds in Taiwan had net inflows of NT$ 414.8bn.

Fixed income fund assets now account for 28% of Taiwan’s onshore fund industry, compared to just 17% the previous year.

Fixed income has now surpassed the marketshare of equity fund assets, which previously had the highest share in the onshore industry, excluding money market funds.

Top asset classes 2018

Broad asset classYTD inflows / (outflows) (NT$m)Total assets (Nov 2018, NT$bn)Market share (Nov 2018)Total assets (Nov 2017, NT$bn)Market share (Nov 2017
Allocation / mixed asset

49,149

2218.55%186

7.93%

Alternative

37,293

1796.92%166

7.08%

Commodities

(704)

40.15%5

0.21%

Equity

50,778

67225.99%708

30.18%

Fixed income

342,003

72428.00%401

17.09%

Miscellaneous

(6,492)

441.70%50

2.13%

Money market

(57,193)

74228.69%830

35.38%

TOTAL

414,834

2,586100.00%2,346

100.00%

Source: Morningstar Direct

All broad fund categories saw net inflows during the period, with the exception of commodities and money market funds, the data shows.

Sub-asset classes

Within the sub-asset classes, fixed term funds had the highest net inflows during the year. Onshore renminbi bond funds and US dollar government bond funds were also among the most popular sub-asset classes among Taiwan investors.

The inflows into onshore renminbi bond funds were staggering: Total assets increased to NT$68bn last year from just NT$1bn the previous year.

Top 10 net inflows by sub-asset class in 2018*

Name

YTD inflows (NT$m)

Total assets (Nov 2018, NT$bn)Market share (Nov 2018)Total assets (Nov 2017 NT$bn)

Market share (Nov 2017

Fixed Term Bond

98,622

1254.82%27

1.16%

Other Bond

86,006

2128.20%135

5.75%

RMB Bond – Onshore

67,030

682.65%1

0.05%

USD Government Bond

47,575

813.13%34

1.46%

TWD Moderate Allocation

39,689

1355.24%103

4.37%

Trading – Leveraged/Inverse Equity

36,934

1666.40%152

6.49%

USD Corporate Bond

32,878

321.25%

Taiwan Large-Cap Equity

32,323

1194.59%87

3.70%

China Equity – A Shares

30,088

1184.56%127

5.39%

Global Emerging Markets Bond

21,028

511.98%33

1.40%

Source: Morningstar Direct. *to November 30, 2018.

Within equities, leveraged and inverse (L&I) products, Taiwan large cap and China A-shares were among the most popular categories last year.

Calendar year outflows

On the flipside, Taiwan dollar-denominated money market funds saw the highest net outflows last year. Regional bond and equity funds also saw net outflows, including Asia bond, Asia-Pacific equity, Greater China equity and global bond funds.

Top 10 net outflows by sub-asset class in 2018*

Name

YTD outflows (NT$m)

Total assets (Nov 2018, NT$bn)Market share (Nov 2018)Total assets (Nov 2017 NT$bn)

Market share (Nov 2017)

TWD Money Market

(55,354)

73128.25%817

34.82%

Asia High Yield Bond

(9,472)

301.16%44

1.87%

Asia Bond

(6,142)

150.60%22

0.95%

Other

(5,804)

301.16%36

1.54%

Asia-Pacific incl Japan Equity

(4,028)

80.31%13

0.55%

Greater China Equity

(3,688)

391.52%55

2.35%

Global Bond

(3,360)

100.39%14

0.59%

Other Equity

(3,333)

40.16%5

0.20%

Europe Large-Cap Blend Equity

(3,242)

60.25%11

0.47%

Sector Equity Biotechnology

(3,203)

80.32%11

0.46%

Source: Morningstar Direct. To November 30, 2018.

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