Funds managed by the Bureau of Labor Funds recorded a loss of about NT$1.2 billion (US$36.15 million) in February, in the wake of volatilities on global financial markets amid fears over tariff threats of US President Donald Trump’s administration.
The bureau in a statement said the funds’ accumulated gains, which reflect overall increases in the value of assets and investments, totaled NT$107.5 billion in the first two months of this year, down from NT$108.7 billion a month earlier.
That translated to a rate of return of 1.59 percent in the two months, the bureau’s data showed.
Photo: CNA
Global markets felt the pinch from uncertainties created by the US’ tariff policies, bureau Deputy Director-General Liu Li-ju (劉麗茹) said.
Expectations about a rate cut by the US Federal Reserve were eased amid growing concerns over inflation in the US economy which also dampened market sentiment, the bureau said.
The TAIEX, the benchmark weighted index on the Taiwan Stock Exchange, fell 470.23 points, or about 2 percent, in February.
The bureau said it allocated 42.58 percent of the funds to domestic markets, while the remaining 57.42 percent went overseas.
The combined value of the funds managed by the bureau, including the Labor Pension Fund, the Labor Retirement Fund, the Labor Insurance Fund, the Employment Insurance Fund and the Arrear Wage Payment Fund, totaled NT$7.19 trillion as of the end of February, it said.
The value of assets in the new Labor Pension Fund, launched in 2015, totaled NT$4.73 trillion at the end of February, making it the largest fund, and its rate of return was 1.59 percent in the first two months of the year, the bureau said.
The Labor Retirement Fund, which has been in place since 1984, had about NT$1.07 trillion in assets, with a rate of return of 1.96 percent in the two months, the bureau added.
The losses of the labor funds could extend into last month when the global financial markets encountered even more headwinds ahead of an announcement of a fresh round of tariffs by Washington, Liu said.
In Taiwan, the stock market fared even worse last month as the TAIEX tumbled 2,357.28 points, or 10.23 percent.
The local bourse accounted for about 20 percent of the total investments by the funds, Liu said.
Despite the short-term volatilities, the local stock market still enjoyed sound fundamentals in the longer term as Taiwan’s economy continued to benefit from a stronger electronics sector riding the waves of emerging technologies, she said.
The labor funds have been stable and sound in the past decade, citing a rate of return of 6.88 percent between 2015 and this year, the bureau said.
Last year, the labor funds posted gains of more than NT$1 trillion, which translated to a rate of return of 16.48 percent.
Meanwhile, the Bureau of Public Service Pension Fund yesterday said that the Public Service Pension Fund managed by the bureau recorded NT$6.58 billion in gains in the first two to three months of this year with a rate of return at 0.65 percent.
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