Taiwan’s mutual funds declined 4.3 percent last month to their lowest level this year after the US Federal Reserve’s meeting sidelined investors, but equity funds made a marked advance amid reviving interest in risky assets, JPMorgan Asset Management Taiwan said in a report.
Sales of stock, bond, balanced, currency, index and other fund products totaled NT$1.9 trillion (US$64.5 million) last month, down 4.3 percent from August and below NT$2 trillion for the second straight month, the local unit of the US fund house said.
Currency funds led the fall after seeing capital flight of NT$84.9 billion last month, dragging down the overall amount by 9.73 percent to NT$787.64 billion, the report found.
“Uncertainty over the Fed’s policy stance on quantitative easing and currency volatility in emerging economies dampened interest in currency funds,” the report said, adding that currency funds weakened 5.5 percent in the last quarter.
Index funds fell NT$9.41 billion, or 10.53 percent, to NT$149.53 billion last month compared with a month earlier, deepening the quarterly loss to 14.01 percent, the report said.
Fixed income products dropped 0.89 percent, or NT$2.44 billion, to NT$270.63 billion last month, as investors continued to trim position on expectations that bond prices may fall once the Fed and other central banks raise interest rates, the report said.
Investors cut 4.17 percent of onshore bond holdings and 4.78 percent of offshore bond positions respectively, but increased stakes in high-yield bonds by 1.45 percent, the report said, attributing the mixed results to the latter’s relatively high yields and low default rates.
Stock funds bucked the trend and grew 1.46 percent, or NT$7.61 billion, to NT$526.95 billion at the end of last month, the report said, consistent with the TAIEX’s performance last month, when foreign players bought local shares for 21 consecutive sessions.
Stock funds climbed 2.16 percent last quarter from the second quarter, the report said.
The figures show stock funds are reclaiming their status as the mainstream investment tool, thanks to stronger Chinese and European shares, while fiscal and political crises gripped the US, JPMorgan fund manager Liu Ling-chun (劉玲君) said.
Worldwide, stock funds have seen US$312 billion in net capital inflows this year, way more than the US$162 billion in bond funds. This is the first time this has happened since the global financial turmoil began in 2008, Liu said.
Chao Hsin-ying (趙心盈), another fund manager at JPMorgan Taiwan, forecast European bourses may climb higher on the back of a stabilizing economic situation and slowing tightening measures.
Chinese shares may also improve going forward despite a lackluster showing this year, since Beijing may announce more measures to strengthen its economy at its leadership meetings next month, said Yen Rong-hung (顏榮宏), JPMorgan Taiwan’s Asia fund manager.