Sun, Apr 20, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Taiwan awards $750m in global emerging-market portfolios

Thursday, August 12, 2010

James Syme
Opalesque Industry Update – Taiwan’s Labour Pension Fund (LPF) has become the latest Asian government institution to take a plunge into the growing trend of taking higher risks in their investments for optimum returns. According to a report by Asian Investor, the LPF has awarded at least $750m to two U.S. managers – Morgan Stanley Investment Management and emerging-market boutique Esemplia (part of Legg Mason) – and Zurich-based Vontobel to run its global emerging market portfolio.

The $32.71bn LPF offered the bids for the four-year mandate in April and announced on Wednesday it awarded the three managers $250m each. The LPF said it was targeting returns of at least 250 basis points above the MSCI Emerging Markets IMI Index net of fees and on a rolling three-year basis.

On Wednesday, emerging-market stocks rose to their highest levels since April as technology stocks beat estimates and news reports indicated the Federal Reserve may extend stimulus efforts to stir up the economy, Bloomberg reported.

The MSCI Emerging Market Index climbed 0.5% to 1,015.99 by 5 p.m. in New York, the largest rally in a week. Developing-nation bonds advanced, sending the extra yield investors demand to hold the securities over U.S. Treasuries 17 basis points lower to 2.58 percentage points, the biggest drop since May 27, according to JPMorgan Chase & Co.’s EMBI+ Index. The Brazilian real led currency gains, strengthening 0.6% against the dollar.

Global emerging markets outperforming developed markets
An independent study by Barings Asset Management, an international investment management firm with $43.1bn in AuM, showed that global emerging markets outperformed their developed markets counterparts at the height of the global financial crisis.

Barings cited the outlook for emerging fixed income markets and the recovery in the local currency debt and corporate bond markets as the driving force for the outperformance. James Syme, manager of the Baring Global Emerging Markets Fund, explained that the emerging world can boast higher savings to GDP ratios compared to the developed world with much lower consumer indebtedness, current account surpluses, youthful populations and stronger banking systems.

Early this week, Giancarlo Perasso, Chief Economist for the Matrix Redux Emerging Markets Fund, which is managed by $5.56bn UK based asset manager Matrix Group, predicted that emerging currencies would become winners as uncertainties in developed countries continue to worry investors.

Perasso explained that emerging markets will continue to grow, but most of these economies will implement modest changes in policy, including the postponement of the monetary tightening (See Opalesque Exclusive:here).

Taiwan’s government entities, looking for alternative investments
In March, Taiwan’s Public Service Pension Fund, announced it was reportedconsidering launching a hedge fund ETF portfolio to solve underfunding and mismatches in assets and liabilities.

Tsay Feng-Ching, vice-chairman of the PSPF management board in Taipei, said that the Ministry of Finance and the PSPF have long considered the possibility of introducing a defined-contribution system alongside its present defined-benefit scheme.
-Precy Dumlao

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Banner
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: Classic Auto Funds Limited (CAF) launches several car investing funds[more]

    Bailey McCann, Opalesque New York: A new trend in alternative alternatives is emerging - car appreciation funds. Classic Auto Funds Limited (CAF) is the first to market with several funds that make super elite luxury cars into real asset investments. As a result of growing overseas demand couple

  2. CTAs could face new challenges in a rising rates environment[more]

    Bailey McCann, Opalesque New York: CTAs have taken a beating performance wise lately, and asset flows reports show that investors aren't sticking around to see how the movie ends. Now, a new white paper from Roy Niederhoffer and Coen Weddepohl notes that as interest rates start to tick back u

  3. Investing – Big hedge funds bought Puerto Rico's junk bonds, Fidelity explores new trading venue amid flash trade concerns, Crisis-era Greek bonds reward early buyers with big effective returns, Cargill unit discloses stake in Freddie preferred[more]

    Big hedge funds bought Puerto Rico's junk bonds From Reuters.com: Several large hedge funds doubled down on Puerto Rico in last month's giant bond sale despite the U.S. territory's financial struggles, the Wall Street Journal reported, citing confidential documents reviewed by the newspa

  4. Opalesque Exclusive: Hedge fund replicators evolve[more]

    Bailey McCann, Opalesque New York: Hedge fund replicators as a group of products tend to get a bad rap from hedge fund managers who suggest that the best a replicator can offer is dynamic beta capture. A

  5. Commodities – Popular value fund manager David Iben bets on Russia, gold,[more]

    From Reuters.com: With large bets on Russia and North American gold miners, one of the best performing stock pickers in the wake of the 2008 financial crisis is back with a new fund that reflects his deep aversion to following the crowd. In the Kopernik Global All-Cap Fund, David Iben is follo