JPMorgan Asset Management Taiwan — the second-largest fund house in the nation by assets — is seeking to boost sales of multi-asset funds and retirement products this year amid a low-yield and high-risk environment, company executives said yesterday.
While the US fund manager rejects the notion of “a profit recession,” it said it would be very difficult to reap returns this year as almost all investment tools have incurred losses so far.
DIFFERENTIATION
“We aim to differentiate ourselves from our competitors by focusing on multi-asset funds that feature greater investment flexibility, but lower risks,” managing director Judy Shih (石恬華) told a news conference.
With assets under management in Taiwan approaching US$1.6 billion at the end of last year, JPMorgan ranked second only to US rival AllianceBernstein LP in its presence in the nation.
The multi-asset fund has hit NT$6 billion (US$178.1 million) in Taiwan trading since its launch last month, with a return of 2.8 percent, Shih said.
A multi-asset class investment contains several asset classes — including cash, equities, futures and bonds — thereby reducing risks by increasing diversification.
However, it might also hinder potential returns.
Taiwan’s fund market totaled NT$5.37 trillion last year, with onshore funds of NT$2.2 trillion at the end of December and offshore funds of about NT$3.18 trillion in November, according to the Securities Investment Trust and Consulting Association’s (投信投顧公會) Web site.
The figures for onshore funds represented an 11.6 percent increase from the level a year earlier.
TARGETS
Shih declined to comment on the company’s revenue or market share target, citing uncertainties due to potentially wide fluctuations in the market.
“Rather, we aspire to enlarge the market by tapping into the retirement fund market,” Shih said.
The nation’s fast-aging population lends support for such products and the company might introduce them once the government removes legal barriers, product management director Liu Ling-chun (劉玲君) said.
Retirement funds are common in the US and Europe, but are not yet available in Taiwan, Liu said.
Both financial and labor authorities would have to give the go-ahead and set a platform for such products, Liu said, adding that deregulation is unlikely to take place until after the presidential handover in May.
RETENTION
Retention poses another challenge for fund houses this year, as investors might grow conservative and uneasy about market swings, intermediary relationships analyst Ansen Chen (陳威旭) said.
Sales channels such as banks favor promoting savings-like insurance policies this year because they guarantee interest payments, albeit at a low rate, Chen said.
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