Michelle Maa, Aberdeen Standard Investments
Columbia Threadneedle Investments recently exited the Taiwan market, terminating sales of 13 offshore funds, according to its Taiwan master agent Pinebridge Investments.
Hong Kong-based Value Partners left Taiwan after selling its share in an onshore joint venture fund management operation to Aberdeen Standard Investments (ASI) in 2017.
ASI, which had been selling offshore funds in Taiwan for 10 years, acquired onshore capability by buying the whole joint venture. In March, it completed integration of the off- and onshore operations and now intends to push into Taiwan by developing locally-domiciled funds and tailoring its offshore funds to fit local demand, according to Michelle Maa, country head for ASI in Taiwan.
The firm recently launched its first onshore product in Taiwan, a multi-asset fund that aims to provide downside protection for the increasing segment of aging Taiwan investors who are interested in retirement products.
Maa told FSA that launching Taiwan-domiciled funds is essential for any foreign manager who aims to build a brand and develop fund distribution for its offshore products.
“The capability to manufacture products locally is crucial. It offers us a more agile approach on product design to cater to the needs of local investors in such a highly competitive market.”
She believes because ASI Taiwan has an onshore operation, they can work with colleagues outside of Taiwan to modify foreign funds for the domestic market.
Concentrated choices
“In Taiwan, there has been a concentration issue as investors put most of their money in some similar products,” Maa said, citing one example as dividend-paying funds.
She added that the firm’s strategy for the offshore division is to widen the investment choices for domestic investors.
ASI currently distributes 27 Luxembourg-domiciled funds to Taiwan investors.
She revealed the firm intends to register with the local regulator for its Luxembourg-domiciled Frontier Markets Bond Fund this year.
“The product targets clients in Taiwan who want to pursue new opportunities in the more emerging markets. We saw that there are a lot of markets in the frontier world that are under-researched by most of the investment managers.”
Last year, ASI became the first asset manager to distribute an Indian bond fund in Taiwan. The Aberdeen Global Indian Bond Fund invests in investment grade corporate and government bonds. It aims to deliver yield to maturity of 8%, according to the fund factsheet.
The India bond product had assets of $354m at the end of 2017 and Taiwanese investors make up roughly 14.5%, according to the fund document.
Meanwhile, the firm will also increase onshore marketing efforts. “We are still new to the onshore fund market. In the coming months, our plan is to step up the promotional effort to increase our visibility.”
The Aberdeen Global Frontier Markets Bond Fund versus category average
Source: FE. The fund is available for professional investors in Hong Kong and Singapore only. Fund NAV is converted in US dollar for comparison purposes. The fund’s benchmark the JPM Next Generation Markets Index is not available on FE.
The Aberdeen Global Indian Bond Fund versus category average
