Offshore fixed income funds continue to dominate the Taiwan market with 48% marketshare, but the asset class as a whole recorded a net outflow of NT$95.26bn ($3.12bn) during the first six months of 2018, according to Sitca data.
High yield bond funds led the outflows, dropping 10.75% to NT$102.14bn from end-2017.
In offshore fixed income, the best performer in the first half was Parvest Bond JPY Fund and the worst performer was Silverdale Bond Fund, according to FE (chart below).
Inflows
During the first half, investors moved into balanced (mixed asset) funds and money market funds (MMFs). Balanced funds added a total of NT$64.3bn in assets, up 15.3%. MMF assets grew 18.64% to NT$4.9bn.
Taiwan has 17 offshore MMFs for sale to local investors, according to FE.
In terms of geographic allocation, in both equity and fixed income, Taiwan investors continue to prefer funds with exposure to Greater China. Funds across all asset classes investing in China and Hong Kong saw a 10.72% increase in AUM.
Other regional funds had outflows, the strongest from emerging markets and Asia-Pacific (including Japan) products.
FSA reported earlier that some fund managers have recently left the Taiwan market. Earlier this year, Columbia Threadneedle Investments exited, terminating sales of 13 offshore funds. Hong Kong-based Value Partners also left Taiwan after selling its share in an onshore joint venture fund management operation to Aberdeen Standard Investments (ASI) in 2017.
In the first half, overall assets in Taiwan’s offshore funds fell 0.93% to NT$3.46trn.
Fixed income funds remained the most preferred offshore category with NT$1.65trn in assets, followed by NT$1.29trn in actively-managed equity products.
Offshore funds by asset class (in NT$)
| December 2017 | June 2018 | Market share | Change | |
| Total equity funds | 1.3trn | 1.29trn | 37% | -0.50% |
| Bond funds | 79.3bn | 79.7bn | 2% | 0.58% |
| High yield bond funds | 950.1bn | 847.9bn | 24% | -10.75% |
| Emerging market bond funds | 412.3bn | 427.9bn | 12% | 3.79% |
| Others | 308.1bn | 298.9bn | 9% | -2.98% |
| Total fixed income funds | 1.75trn | 1.65trn | 48% | -5.44% |
| Balanced funds | 421.8bn | 486.1 | 14% | 15.25% |
| Money market funds | 26.3bn | 31.2bn | 1% | 18.64% |
| Fund of funds | 0.0bn | 0.0bn | 0% | 0.00% |
| Exchange traded funds | 0.3bn | 0.3bn | 0% | -7.34% |
| Others | 3.7bn | 3.5bn | 0% | -4.75% |
| Total | 3.5trn | 3.46trn | 100% | -0.93% |
Source: Sitca
Best and worst performers in 1H
Top and bottom three fixed income funds
