Taiwanese investors showed a stronger interest in mutual fund products last quarter compared with three months earlier, as record equity rallies in the US, Europe and Japan boosted confidence, the local unit of JPMorgan Asset Management said in a recent report.
The fund house’s regular savings plan (RSP) index — a gauge of investor interest in mutual fund products — stood at 56 in the final quarter of last year, up from 52 in the preceding quarter, ending two straight quarters of decline caused by market unease over the US Federal Reserve’s stance on quantitative easing (QE), the report showed.
“The latest reading bodes well for fund sales going forward now that uncertainty over the QE tapering has subsided and the global economy is on track to a recovery,” JPMorgan Taiwan vice president Alex Chio (邱亮士) said in the report.
A RSP score above 50 suggests active demand for mutual funds and a lower score indicates shrinking interest.
The index derives its value from quarterly surveys on the number of RSP depositors and amounts deposited, as well as new RSP accounts.
The sub-index on the prospect of savings plan product sales increased by 10 points from October to December last year, compared with three months earlier, while the number of depositors climbed to 1.52 million and the overall value rose to NT$9.84 billion (US$323.17 million), the report said.
Funds tracking Chinese shares are likely to draw the most attention this quarter, with 18 percent of respondents saying they plan to increase their stake, followed by US funds at 12 percent, European funds at 11 percent and Taiwanese funds at 10 percent, the report showed.
While the benchmark TAIEX rose only 11 percent last year, lagging behind bourses in developed markets, 186 funds tracking local shares gained an average of 20 percent in value, the report said.
“That lends support to the importance of equity selections in deciding gains and losses,” Chio said.
Altogether, 62 percent of RSP investors recorded gains, while 24 percent incurred losses last year, with most returns falling within a range of 10 percent, according to the report.
The findings are based on a survey of 2,830 investors conducted from Dec. 26 to Jan. 12.
While regular savings plans are a good long-term investment tool, investors still need to adopt a policy on when to take profit and stop losses to maximize gains, Chio said.
Bank SinoPac (永豐銀行), the banking arm of SinoPac Financial Holding Co (永豐金控), suggested investors add yuan to their RSV portfolio this year to benefit from higher interest yields and potential yuan appreciation. The lender leads in terms of yuan deposits.