Funds domiciled in Taiwan gathered TWD134.8bn in inflows in the second quarter of 2022, dropping from TWD293.5bn in the first three months of the year, according to Morningstar Direct data.
Onshore Renminbi bond funds bled further in the second quarter with outflows of TWD95.3bn, following net redemptions of TWD22.2bn in the previous quarter.
US dollar government bond funds ranked second in terms of net outflows, at TWD22.9bn.
Only five of the 23 fixed income groups categorised by Morningstar recorded net inflows.
As a result, fixed income products, the largest asset class in Taiwan, saw net redemptions of TWD34.9bn during the period.
Yet US dollar corporate bonds, with TWD64.97bn, topped fixed income in terms of net inflows, and ranked second overall.
On the other hand, equity funds gained TWD167.9bn in the quarter, representing 10% organic growth from the first quarter.
Within the asset class, Taiwan large-cap equity and tech equity funds remained local investors’ favourites.
The former posted net inflows of TWD132.2bn during the quarter, while tech funds (TWD13.87bn) have recorded net inflows for nine consecutive quarters.
Taiwan small/mid-cap equity collected TWD4.8bn in new assets from March to June this year, but Morningstar data showed that investors were exiting positions in US large-cap blend equity and global large-cap growth equity, with outflows amounting to around TWD1bn for each category.
Individual fund performance
CTBC’s Vietnam Equity Fund topped actively managed funds in terms of inflows with TWD3.4bn, followed by three new strategies by Blackrock, FSITC, and Mega.
ETFs continued to gain popularity among Taiwan investors, with Yuanta/P-shares Taiwan Top 50 ETF gaining TWD54.06bn during the quarter.
This bolstered Yuanta Financial’s market-leading position as it gathered another TWD96.9bn new net assets during the quarter.
Meanwhile, Fuh-Hwa was the asset manager with the largest outflows among all providers due to redeemers from its China policy bank bond ETF and a US treasury ETF.
Driven by the largest sustainable fund, Cathay Sustainability High Dividend ETF, Taiwan reported TWD36.3bn into ESG funds.
At the end of June 2022, assets in ESG funds totalled TWD190.6bn, Morningstar data presented.
Taiwan fund flows Q2 2022
| Sector | Net assets (TWD bn) June 2022 | Market share % June 2022 | Net flows (TWD bn) Q2 2022 |
| Equity | 1,559.6 | 33 | 167.9 |
| Fixed income | 1734.6 | 37 | (34.9) |
| Allocation | 381.9 | 8 | 2.0 |
| Alternative | 0.5 | 0 | (0.1) |
| Commodities | 6.5 | 0 | (2.4) |
| Miscellaneous | 220.7 | 5 | 19.8 |
| All long term | 3903.9 | 83 | 152.3 |
| Money market | 799.2 | 17 | (17.5) |
| Total | 4703.1 | 100 | 134.8 |
