Fund Product Features Contribute To Asset-Gathering Success In Taiwan

While fund performance remains important when Taiwan retail investors consider investing in fund products, other specific needs and preferences have also begun to influence how fund products are shaped.

There seems to be an increasingly long list of "must-have" features. Some managers have been quick to recognize this trend and have been adapting to it, while others wait on the sidelines, weighing the pros and cons of conforming to these preferences.

According to a new report from global financial services research firm Cerulli Associates Taiwan is one of the more popular retail mutual fund markets for foreign asset managers because of its accessibility. One popular fund product feature is regular income.

So much so, it has become almost a necessity for asset-gathering in Taiwan that funds have an monthly income feature. The need for regular income increased in importance during the high-yield bond craze in 2012, and has since become commonplace for almost all funds.

The dividend component is important as retail investors in Taiwan want tangible returns-a monthly income stream seems more assuring to them. Specifically, investors like to see monthly dividend amounts being printed on their bank account statements.

Another popular product feature in Taiwan centers on currency share classes. For instance, fund products with the renmimbi (RMB) share class have grown spectacularly in asset size in Taiwan over a short period of time. Only allowed from 2013, the number of RMB share class funds in Taiwan ballooned to 122 by the end of June this year, with assets totaling US$1.5 billion.

Funds with RMB share class have to be locally domiciled, but funds with other foreign currency share classes like the South African rand or the Australia dollar can be foreign-domiciled.

 

 

 

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