Labor funds post 14.25% YTD gains despite poor performance in August

Taipei, Oct. 1 (CNA) Funds managed by the Ministry of Labor's Bureau of Labor Funds posted solid year-to-date (YTD) returns despite limited gains of NT$1.34 billion (US$42.09 million) in August, compared with stronger gains of NT$86.4 billion in July.

In a statement, the bureau said on Tuesday that the funds' accumulated gains, which reflect overall increases in the value of assets and investments, totaled NT$887.10 billion in the first eight months of the year, up NT$1.34 billion from the end of July.

The bureau said global financial markets encountered headwinds in August as the weaker-than-expected U.S. manufacturing and job data for July raised fears over a possible recession.

But such volatility was assuaged by stronger-than-expected July retail sales data as well as Federal Reserve Chairman Jerome Powell's speech at the annual economic policy symposium in Jackson Hole on Aug. 23 in which he hinted that the "time has come" for a rate cut cycle, the bureau said.

In August, the Taiex, the weighted index of the Taiwan Stock Exchange, rose 0.31 percent, while Taiwan's weighting in the MSCI World Index increased 2.54 percent with the MSCI Emerging Markets up 1.64 percent.

In the first eight months of the year, however, the Taiex soared 24.19 percent, while the MSCI World Index gained 15.97 percent with the MSCI Emerging Markets up 9.44 percent.

According to the bureau, 56.90 percent of the state-owned labor funds were overseas investments while 43.10 percent were domestic investments, as of the end of August.

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 about NT$6.796 trillion, as of the end of August.

Based on that value, the gains in the first eight months of this year represented a rate of return of 14.25 percent, according to the bureau.

The value of assets in the new Labor Pension Fund, launched in 2015, totaled NT$4.43 trillion at the end of August, the highest of any fund, and its rate of return from the start of the year to the end of August was 14.08 percent, the bureau said.

The Labor Retirement Fund, which has been in place since 1984, had about NT$1.04 trillion in assets as of the end of August, with a rate of return of 16.71 percent over the same period, the bureau said.

Meanwhile, the Bureau of Public Service Pension Fund said on Monday that the Public Service Pension Fund recorded NT$130.55 billion in gains in the first eight months of 2024, with a rate of return of 14.56 percent.