Foreign asset managers operating in Taiwan have launched around 20 fixed maturity products since June 2018, which accumulated NT$103.46bn ($3.3bn) in assets as of the end of June 2019, according to data from Morningstar Direct, which only includes Taiwan-domiciled products.
Of those products, 13 were launched in 2019 and they have already accumulated total net inflows of NT$67.7bn.
Five foreign managers have taken advantage of the fixed maturity product fever in Taiwan, led by Invesco and Schroders.
Invesco alone manages 11 fixed maturity bond funds, which had one-year net inflows of NT$55.7bn ending June 2019. The assets in these products have more than tripled to NT$85bn from NT$25bn in June last year.
Now, FMP products account for at least 91% of Invesco’s AUM in Taiwan.
Foreign managers in Taiwan with FMPs
|
Number of fixed maturity products |
1-year* FMP net inflows (NT$ bn) | FMP AUM (NT$ bn, June 2019) | % of FMP AUM to total AUM |
Total AUM of locally-domiciled products managed (NT$ bn, June 2019) |
|
| Invesco |
11 |
55.7 | 77.54 | 91% |
85 |
| Schroders |
8 |
18.25 | 39.9 | 78% |
51 |
| Nomura Asset Management |
5 |
9.9 | 10.43 | 12% |
87 |
| Manulife Investment Management |
3 |
5.88 | 7.23 | 23% |
32 |
| Eastspring Investments |
1 |
10.2 | 10.2 | 12% |
86 |
Source: Morningstar Direct. *One year to end June 2019.
Net inflows into Schroders’ FMPs have helped the firm’s AUM to NT$51bn from NT$31bn in June last year, the data shows.
Invesco and Schroders together hold at least 50% of the total FMP market, including those that are issued by domestic fund managers, according to a Citi report.
In total, fixed maturity bond funds in Taiwan doubled to NT$234bn from NT$125bn last year and account for 7.39% of the total assets for locally-domiciled products in the country, according to Morningstar Direct.
Launching FMPs in Taiwan has become popular among managers, especially since Taiwan investors on the average hold onto a product for around five months, Stewart Aldcroft, chairman at Citirust, said previously.
“So instead of having your five-month holding period, which you might get on an equity fund, this could be the whole of the four-six years, which is much more attractive from the point of view of a fund management business,” he said.
The demand for FMPs elsewhere in Asia has also been strong, with a number of fund managers taking advantage of the investment trend. The latest is Aviva Investors, which launched a FMP with a four-year tenor to accredited investors in Singapore. It is also the firm’s first FMP.
Other fund managers introducing FMPs in Hong Kong and/or Singapore include Eastspring Investments, HSBC, Amundi and BNP Paribas Asset Management.
Other products
A number of foreign fund houses have managed to get significant inflows from domestic investors without FMP products.
Pinebridge Investments, Allianz Global Investors, UOB Asset Management, Franklin Templeton, Aberdeen Standard and Neuberger Berman are among the top 10 foreign managers having the highest net inflows for one year ending June 2019, Morningstar data shows.
Top 10 foreign managers with highest net inflows (NT$ bn)
| Name |
One-year net inflows |
Total AUM |
| Invesco Taiwan |
55.2 |
85 |
| Schroder Investment Mgmt Taiwan |
16.8 |
51 |
| Pinebridge Investments Mgmt Taiwan |
7.5 |
108 |
| Allianz Global Investors Taiwan |
4.7 |
104 |
| Eastspring Securities Invst Tr Co |
4.4 |
86 |
| UOB Asset Management Taiwan |
4.4 |
7 |
| Franklin Templeton Sinoam Sec Inv Mgmt |
3.5 |
82 |
| Nomura Asset Management Taiwan |
3.4 |
87 |
| Aberdeen Standard Investments Taiwan |
3.2 |
7 |
| Neuberger Berman Taiwan |
2.6 |
4 |
Source: Morningstar. Note: Data includes locally-domiciled funds only. June 2018-June 2019.
Pinebridge saw huge demand for its US Dual Core Income fund, which had net inflows of NT$3.9bn during the period. Its other products, the Asia-Pacific High Yield Bond Fund (NT$2bn in net inflows) and the China A-Shares Quantitative Equity Fund (NT2.4bn), also did well.
Allianz GI’s winning product is the US Low Average Duration High Yield Fund, which had net inflows of NT$7.5bn, followed by the Income and Growth Fund (NT$3.8bn).
Franklin Templeton, meanwhile, had the highest net inflows (NT$11bn) out of all foreign fund managers at the fund level, with its SinoAm Emerging Market Bond Fund, Morningstar data shows.
