Mon, Nov 05, 2018 - Page 16 News List

Taiwan investors favor regular returns, less risk

By Kao Shih-ching  /  Staff reporter

More than 80 percent of mutual fund investors in Taiwan prefer funds with monthly dividends over other fund types, in line with their peers in Hong Kong and Singapore, but not those in the US, Standard Chartered Bank Taiwan Ltd (渣打台灣銀行) said on Wednesday last week.

Local investors like to receive fund returns regularly even though funds yield less than other investments, Standard Chartered Taiwan’s head of wealth management Cindy Fu (傅敏儀) said.

Most fund investors just deposit the dividends into their bank accounts and receive returns that are no higher than regular savings, Fu said, adding that they should invest the earnings into other funds, “so money can make money.”

While funds are generally viewed as low-risk investment options, many investors still sit on the fence, the bank said, citing its recent survey.

Of the survey’s respondents, 49.5 percent said they were worried about potential losses, choosing the right investment and having no time to do research.

In Taiwan, online fund investors care mostly about transaction fees and risk disclosures, while those investing in funds offline depend more on professional advice from financial experts and are cautious about Internet transactions and information security, the survey found.

Investors in Taiwan held NT$2.49 trillion (US$81 billion) in onshore funds in September, down from NT$2.52 trillion a month earlier, while their holdings in offshore funds remained flat at NT$3.48 trillion, data compiled by the Securities Investment Trust and Consulting Association (證券投信投顧公會) showed.

PESSIMISM

US-China trade tensions, a surge in US Department of the Treasury yields, the slowdown in economic growth in the third quarter and the US midterm elections tomorrow, have made investors pessimistic about stock market prospects in the months ahead, JPMorgan Asset Management Taiwan Ltd (摩根資產管理) said.

As of Oct. 26, that has caused a massive sell-off across Asia’s equity markets by foreign institutional investors, with the markets in Taiwan, China and South Korea hit the hardest, JPMorgan said in a report on Monday last week.

The Shanghai Composite Index has fallen to its lowest level since 2014 and is down 19 percent this year.

Over the period, South Korea’s benchmark KOSPI index on Friday declined by about 15 percent since the beginning of this year, while Hong Kong’s Hang Seng Index fell 11.5 percent and the TAIEX dropped nearly 7 percent.

JPMorgan said declines in share prices would likely be short-lived, as corporations in Taiwan, China, India, the Philippines and Thailand are expected to make more profits this year than last year, due to their solid fundamentals.

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