The appreciation of the New Taiwan dollar against the US dollar since the beginning of this year depressed the January and February returns of the Labor Pension Fund and other funds managed by the Bureau of Labor Funds, the bureau said on Wednesday.
The NT$3.34 trillion (US$109.15 billion) in funds managed by the bureau had earned NT$16.24 billion this year as of the end of February based on mark-to-market accounting, representing an overall return rate of 0.5 percent, the bureau said in a press statement.
That rate is relatively low, given that the TAIEX surged 6.7 percent over the period and stock markets around the world trended upward, the bureau said.
“The returns would have been more than NT$16.24 billion if not for the effect of the weak US dollar, which eroded overseas returns,” local media outlets yesterday quoted the bureau’s Deputy Director-General Liu Li-ju (劉麗茹) as saying.
The labor funds posted profits of NT$2.64 billion in January and NT$13.6 billion in February, according to the bureau’s tallies.
The NT dollar appreciated 6.35 percent, or NT$1.943, against the US dollar in the first quarter, central bank data showed.
The funds managed by the bureau include the Labor Pension Fund, the Labor Insurance Fund, the Overdue Wages Payment Fund, the Occupation Incidents Protection Fund and the Employment Insurance Fund.
The Labor Pension Fund, which includes the new labor pension system and the previous one, is the largest of the funds, and had a combined total of NT$2.51 trillion as of the end of February, the bureau’s data showed.
The return of the Labor Pension Fund was 0.45 percent as of the end of February, data showed.
Liu said the bureau has not seen volatile fluctuations in global financial markets since the US’ airstrikes against Syria, but the bureau would review its investments in bond markets, currency markets and long-term deposits if the risk control system registers signs of serious instability in global financial markets, she said.
The TAIEX yesterday closed lower, but recovered most of its early losses to remain above 9,800 points.
The index closed at 9,873.37 points, a fall of 0.25 percent
Looking forward, Liu said the global economy is still on track for mild growth.
The bureau would closely observe US President Donald Trump’s policy pronouncements, the pace of the US Federal Reserve’s possible interests rate hikes, and political and economic events in the eurozone, she said.
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