Worldwide financial volatility led to a bruising August for labor funds managed by the Bureau of Labor Funds, eroding aggregate year-to-date gains to NT$577.36 billion (US$17.86 billion), the Ministry of Labor said.
The aggregate year-to-date gains for the labor funds — such as the Labor Pension Fund, the Labor Retirement Fund, the Labor Insurance Fund, the Employment Insurance Fund and the Arrears Wage Payment Fund — declined NT$48.06 billion (US$1.49 billion) in August from NT$625.42 billion in July, data released by the bureau on Monday showed.
Market analysts said that global financial markets, including equities and bonds, were hit by a slower-than-expected recovery in China, as well as a move by Fitch Ratings to cut credit ratings in the US and worldwide corrections of tech stocks related to artificial intelligence development.
Photo: Lee Chin-hui, Taipei Times
The MSCI World Index fell 2.79 percent in August, while the MSCI Emerging Markets Index dropped 5.5 percent.
In Taiwan, the TAIEX declined 2.98 percent.
The labor funds’ assets totaled NT$6.006 trillion, with a rate of return from January to August of 10.44 percent, the bureau said.
As of the end of August, the Labor Pension Fund, launched in 2015, had the highest asset value at NT$3.92 trillion, the bureau said, adding that the rate of return on that fund was 10.34 percent over the eight-month period.
The Labor Retirement Fund, which has been in place since 1984, had about NT$1.007 trillion in assets, with a rate of return of 11.84 percent in the first eight months of this year, the bureau said.
The rate of return of the labor funds averaged 5.14 percent from January 2013 to August, it said.
Although many countries have encountered an economic slowdown, the bureau said that it had still enacted measures to tighten its monetary policies to take on inflationary pressure.
A spike in international crude oil prices also pushed up consumer prices and created downside risks to the global economy, it said.
While these unfavorable factors would lead to further volatility in financial markets, the bureau said it would continue to diversify its investment portfolios to reduce market risks and push up the labor funds’ returns.
Individuals would receive gains from bureau-managed funds annually, it added.
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