Out of the 20 foreign asset management firms that have locally-domiciled (onshore) funds in Taiwan, 13 had net inflows for the full-year 2019, according to data from Morningstar Direct.
Invesco led the inflows with NT$43bn ($1.43bn) in net new money, followed by Pinebridge Investments and Schroders.
Foreign firms with net inflows
| Firm |
Fund flows (2019, NT$ bn) |
| Invesco Taiwan Limited |
43.45 |
| Pinebridge Investments Mgmt Taiwan Ltd |
31.57 |
| Schroder Investment Mgmt (Taiwan) Ltd |
25.06 |
| Eastspring Securities Invst Tr Co Ltd |
15.75 |
| Allianz Global Investors Taiwan Ltd |
12.99 |
| UOB Asset Management (Taiwan) Co.,Ltd. |
9.43 |
| Franklin Templeton Sinoam Sec Inv Mgmt |
9.13 |
| Aberdeen Standard Investments Taiwan Limited |
7.59 |
| Nomura Asset Management Taiwan |
6.59 |
| Amundi Asset Management (Taiwan) Co.,Ltd |
6.39 |
| Alliance Bernstein Investments Taiwan Ltd |
3.88 |
| Neuberger Berman Taiwan (SITE) Limited |
3.11 |
| Manulife Asset Management(Taiwan) Co Ltd | 3.05 |
Source: Morningstar Direct. Note: Data is only for onshore funds, including ETFs and money market funds.
Both Invesco and Schroders’ inflows came from global emerging market (GEM) bond funds, Morningstar data shows.
For example, five of Invesco’s GEM bond products, three of which are fixed maturity products (FMPs), collectively had NT$31bn in net inflows, while four Schroder GEM FMPs had NT$23bn. Investors also poured NT$20bn into three Eastspring GEM FMPs.
Like in other markets, FMPs were popular in Taiwan last year, according to Xavier Meyer, head of distribution at Eastspring Investments.
Meyer said distributors were keen on putting FMPs on their platforms. For example, he said one of the firm’s FMPs was distributed by nine partners and raised $320m, while another FMP was distributed by 15 partners and raised $323m.
“In a low-yield, high-volatility investment environment, clients look for higher returns with higher predictability,” he said.
For the other asset managers that had huge inflows, net new money came from various products. Pinebridge, for example, had nearly NT$5bn inflows from an income product and NT$3bn from a high yield EM fund.
Allianz Global Investors, meanwhile also had net inflows across different products, which include a US short duration high income bond fund (NT$7bn) and three Taiwan equity funds (NT$6bn), Morningstar data shows.
Fixed income popularity
GEM bond funds were one of the most popular fund categories in Taiwan last year, attracting NT$116bn in net inflows, Morningstar data shows. In fact, seven of the top 10 categories were in fixed income.
Top 10 fund categories with net inflows
| Name |
2019 (NT$bn) |
| USD Corporate Bond |
316.57 |
| RMB Bond – Onshore |
179.03 |
| Fixed Term Bond |
175.53 |
| USD Government Bond |
149.06 |
| Other Bond |
124.43 |
| Global Emerging Markets Bond |
116.30 |
| TWD Money Market |
106.18 |
| USD Diversified Bond |
33.82 |
| Alt – Volatility |
16.72 |
| Sector Equity Communications |
15.74 |
Source: Morningstar Direct. Note: Data is only for onshore funds, including ETFs and money market funds.
In total, fixed income funds had net inflows of NT$1.12trn, which compares with outflows in equity funds. Mixed-asset products also had some popularity, with NT$10bn in net inflows in 2019.
Total net inflows
|
2019 fund flows (NT$bn) |
2019 AUM (NT$bn) |
2018 AUM (NT$bn) |
|
| Allocation (mixed-asset) |
10.04 |
242 |
210 |
| Alternative |
(52.87) |
162 |
180 |
| Commodities |
1.69 |
7 |
4 |
| Equity |
(91.03) |
751 |
650 |
| Fixed income |
1,121.38 |
1,978 |
789 |
| Miscellaneous |
10.4 |
52 |
38 |
| Money-market |
102,05 |
801 |
695 |
| TOTAL |
1,101.66 |
3,993 |
2,566 |
Source: Morningstar Direct. Note: Data is only for onshore funds, including ETFs and money market funds.
Assets in Taiwan’s onshore industry grew 55% to NT$3.9trn last year, though most of that growth came from ETF assets, which grew twofold to NT$1.67trn from NT 737.5bn in 2018.
China equity redemptions
Meanwhile, seven foreign asset managers had net outflows last year, led by JP Morgan Asset Management with NT$13bn in net outflows, according to Morningstar data.
Foreign firms with net outflows
| Firm |
Fund flows (2019, NT$m) |
| JP Morgan Asset Management (Taiwan) Ltd |
(13,534) |
| HSBC Global Asset Management (Taiwan) Limited |
(3,810) |
| FIL Securities Invmt Trust Co. (TW) Ltd |
(3,747) |
| Blackrock Investment Mgt (Taiwan) Ltd |
(1,996) |
| Prudential Financial Sec Inv Trust Ent |
(1,641) |
| UBS Securities Invmt Advisory (TW) Ltd |
(704) |
| DWS Far Eastern Investments Limited |
(494) |
Source: Morningstar Direct. Note: data only includes onshore funds, including ETFs and money market funds.
JPMAM’s outflows pulled its ranking from being the sixth largest onshore manager to being the tenth (see below for the 10 largest onshore managers in Taiwan).
Much of JPMAM’s net outflows came from its China- equity products. For example, its China A Fund alone had NT$5bn in net outflows. Investors also redeemed NT3.7bn from the firm’s China Income Fund.
Other firms also had net outflows from their China equity products, including HSBC Global Asset Management’s China A-Share Fund, which had $1.2bn in redemptions.
A Taiwan-based spokesman at HSBC Global AM explained that investors took profits from their China-related investments.
He said that equity markets in both onshore and offshore Chinese markets posted high returns in 2019. According to FE Fundinfo data, the MSCI China Index returned 23.66 last year, while the CSI 300 was up 37.19%.
“As a result, investors will choose to redeem their shares when fund performance remains strong,” he said.
The China A-share category alone had the second largest net outflows in 2019, followed by other China-focused categories.
Top 10 fund categories with huge outflows
| Name | 2019 net outflows (NT$bn) |
| Trading – Leveraged/Inverse Equity | (78.05) |
| China Equity – A Shares | (39.26) |
| Taiwan Large-Cap Equity | (14.31) |
| China Equity | (8.25) |
| Greater China Allocation | (7.80) |
| US Large-Cap Blend Equity | (5.9) |
| Greater China Equity | (4.61) |
| Sector Equity Technology | (4.37) |
| Taiwan Small/Mid-Cap Equity | (4.23) |
| Money Market – Other | (4.13) |
Source: Morningstar Direct. Note: Data is only for onshore funds, including ETFs and money market funds.
Top 10 largest onshore asset managers in Taiwan by AUM (2019)
| 2019 Rank | Firm |
2019 AUM ($bn) |
2019 Market share (%) | 2018 Rank | 2018 AUM ($bn) |
2018 Market share (%) |
| 1 | Yuanta Securities Inv Trust Co., Ltd |
577 |
14.46 | 1 | 426 |
16.62 |
| 2 | Cathay Securities Investment Trust |
386 |
9.66 | 2 | 223 |
8.70 |
| 3 | Capital Investment Trust Co., Ltd |
345 |
8.65 | 3 | 216 |
8.41 |
| 4 | Fubon Securities Inv Trust Co Ltd |
290 |
7.26 | 5 | 147 |
5.73 |
| 5 | Fuh Hwa Securities Investment Tr Co Ltd |
289 |
7.24 | 4 | 180 |
7.00 |
| 6 | CTBC Securities Investment Tr Co. Ltd. |
221 |
5.53 | 20 | 41 |
1.59 |
| 7 | KGI Securities Investment Trust Co., Ltd |
166 |
4.16 | 24 | 31 |
1.19 |
| 8 | Pinebridge Investments Mgmt Taiwan Ltd |
125 |
3.14 | 8 | 86 |
3.35 |
| 9 | Allianz Global Investors Taiwan Ltd |
115 |
2.88 | 7 | 88 |
3.45 |
| 10 | JP Morgan Asset Management (Taiwan) Ltd |
103 |
2.58 | 6 | 97 |
3.78 |
| Others (29 firms) |
1,375 |
34.44 |
