Taiwan-based funds attract strong inflows

Taiwan-domiciled funds, excluding mney market products, took in NT$301.2bn during the first six months of this year, compared with NT$146.9m of inflows in the second half of 2020. 

While fixed-income funds remain the favourites of Taiwan investors, equity funds were a major engine for Taiwan’s fund market during the first half of the year, a trend in line with global markets, according to Morningstar.

Over the past 12 months, 13.4% more assets came under the management of equity funds in Taiwan, lifting their overall market share to nearly 30%.

Despite some setbacks owing to an escalating coronavirus outbreak, Taiwan large-cap equities remained among the top-performing categories, gaining an average of 24.8% during the first six months of the year.

Large-cap equity funds were also the second quarter’s top inflow category, receiving a total of NT$72.6bn. Equity technology funds followed with NT$24.3 bn net subscriptions.

Allocation funds continued to enjoy a rise in popularity, as the group collected NT$78.2bn in assets over the past 12 months, which was close to the fixed income category’s NT$81.8bn of inflows.

Several fixed income categories, mainly investing in US-dollar-denominated bonds across global and emerging markets, were among the 10 best-selling asset classes.

However, flows into sustainable assets domiciled in Taiwan slowed significantly to a NT$80m net outflow in the second quarter. Overall, investors have allocated an aggregate of NT$3.24bn into strategies that take into account sustainability issues, according to Morningstar.

Meanwhile, investors also began to redeem their money market funds—primarily denominated in new Taiwan dollars—to deploy into investments.

Money market products – an instrument that is typically used for short-term cash management – saw a massive withdrawal of NT$115.6bn in the second quarter of 2021. This is the single largest quarterly outflow since third-quarter 2008 when NT$127.1bn was withdrawn.

Market leaders

In terms of fund providers, Taiwan’s Yuanta Financial remains a strong market leader with a 15.8% market share. In terms of flow, the firm was a top asset-gatherer in the second quarter, while posting a flat 12 month net flow.

Allianz Global Investors’ product range also gained traction. The European firm ranks 10th by total net assets.

Allianz Global Investors Income and Growth and Allianz US Low Average Duration High Yield were among the strategies that gathered most assets, according to Morningstar.