The fund in 2008 recorded its worst performance in its 14-year history when it posted a loss of NT$86 billion (US$2.7 billion), or a 22-percent plunge, and its fund size shrank to NT$350 billion from NT$410 billion in 2007.
The fund’s net asset value recovered as the local stock market rebounded in 2009. As of the end of November last year, the fund reported profits of over NT$65.4 billion.
Minister of Civil Service Chang Che-shen, who is also chairman of the fund’s management board, said that while the exact numbers are still being calculated, he expects the fund’s total gains to increase 19 percent to reach NT$75 billion for the whole year of 2009.
In previous best performances, the fund yielded a 12-percent return in 1993 and again in 1999.
The local bourse significantly outperformed the fund in 2009. The management team attributed the underperformance to the fund’s diversified portfolio that included time deposits, bonds and overseas equities. The fund invested only in blue chip stocks and did not engage in short-term trading. While these safer investments earned lower profits, they were more resilient to price falls, they pointed out.
For the year 2010, the fund will primarily invest in equities and anti-inflation financial products, the managers said.
In related news, the Labor Insurance Fund netted NT$42 billion with a return of over 18 percent last year. According to the Bureau of Labor Insurance under the Council of Labor Affairs, for 2010 the management board of the fund will reduce the fund’s cash position and increase its bond holdings, especially overseas bonds.
Tuan Chi-min, executive vice president of the BLI, pointed out that the fund’s assets amounted to roughly NT$296.6 billion as of the end of 2009, and the bureau recorded a loss of about NT$50 billion in 2008. (SFC-JC)