Labor funds rebound after fifth-largest monthly gain

Labor funds administered by the Ministry of Labor’s Bureau of Labor Funds totaled an aggregate gain of NT$366.7 billion (US$11.5 billion) in August, the fifth-largest monthly gain on record.

The sizeable gain was driven by a global stock market rebound in August after tech shares struggled in July due to fears of an expanding artificial intelligence (AI) bubble, the bureau said in a statement on Thursday.

The aggregate August gain, which followed an aggregate loss of NT$246.36 billion in July, trailed only previous monthly gains of NT$1.10 trillion in April, NT$586.0 billion in May, NT$418.4 billion in February and NT $394.6 billion in January.

Bureau of Labor Funds signage is pictured at the Ministry of Labor in Taipei in an undated photograph.

Photo: Li Ching-hui, Taipei Times

Due to the August rebound, the bureau said, the accumulated gains in the value of assets in the funds’ portfolios and income on investments totaled about NT$2.32 trillion from January to August.

During the eight-month period, the TAIEX, the Taiwan Stock Exchange’s benchmark index, soared 59.26 percent and the MSCI World Index rose 14.31 percent, while the Bloomberg Barclays Global Aggregate Bond Index dropped 0.30 percent.

The eight-month gain translated into a rate of return of 29.45 percent from January to August for the labor funds, up from 25.03 percent during the January-to-July period, the bureau said.

The bureau said 53.82 percent of the funds’ investments from January to August were in overseas assets, while the remaining 46.18 percent were invested in the domestic market.

The labor funds managed by the bureau have various functions, mainly aimed at helping workers.

Specifically, the Labor Pension Fund collects contributions from employers and employees every month and is managed by the bureau to boost the value of the fund’s assets and stabilize funding for workers’ retirement.

The value of assets in the Labor Pension Fund, launched in 2015, totaled NT$5.98 trillion as of the end of August, the highest among all the labor funds, and its rate of return for the January to August period was 29.25 percent, the bureau said.

The Labor Retirement Fund, which has been in place since 1984, had about NT$1.20 trillion in assets as of the end of August, with a rate of return of 42.09 percent for the eight months, the bureau said.

Liu Li-ju (劉麗茹), deputy head of the bureau, said the labor funds are expected to report a gain for last month that would likely be smaller than in August, citing the TAIEX’s rise of 3.9 percent last month, compared with a 6.98 percent increase in August.

Meanwhile, the Bureau of Public Service Pension Fund said on Thursday that the Public Service Pension Fund, which the bureau manages, recorded NT$340.51 billion in gains in the eight months, equal to a rate of return of 24.93 percent.