Taiwan’s mutual funds last month shrank 3.04 percent to NT$2.47 trillion (US$80.63 billion), ending five consecutive months of gains, as portfolio managers and life insurers trimmed holdings and raised bets in overseas assets, First Securities Investment Trust Co (第一金投信) said on Tuesday.
The retreat was most evident in currency funds, including onshore and offshore funds, which fell 9.95 percent from May to NT$737.35 billion, the state-run fund house said, citing Securities Investment Trust and Consulting Association (證券投信投顧公會) data.
Portfolio adjustments had more to do with changes in fund levels, as currency funds are less risky than other types, the fund house said.
Portfolio managers and domestic insurance companies last month increased their stakes in overseas assets to pursue better yields after the US Federal Reserve raised policy rates by 25 basis points and suggested more hikes this year, it said.
Global investors have pulled out of emerging and advanced markets this year for similar reasons, the fund house said, adding that the adjustments are not a vote of no confidence in fund investment.
US President Donald Trump in March announced plans to hike tariffs, but funds in Taiwan kept rising over the following three months thanks to a stable economy, it said.
While ongoing tariff rows between the US and its major trading partners have dampened confidence, trade disputes tend to have limited effects on financial markets, as seen in the past, it added.
Rather, market pullbacks have proved opportunities for bargain hunting, especially in Chinese shares whose price-to-earnings ratios have dropped to less than their 10-year averages, the fund house said.
Companies involved in the development of artificial intelligence, financial technology and biotechnology might emerge unharmed from the tariff disputes because of their robust earnings potential, it said.
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