About SITCA

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  Looking back at 2017, it was a tumultuous year in international politics and global economics. In the beginning of the year, the newly-elected US President Donald Trump announced the United States’ withdrawal from TPP and NAFTA impacted the global financial markets. Middle of the year, major nations of the European bloc namely France, Germany, and Netherlands held their national elections that brought about uncertainty to the region. By the end of the year, China held the 19th Communist Party of China National Congress that demonstrated President Xi’s expanded leadership and power, as well as a shift in global economics. Not to mention, throughout the year, North Korea tested
Chairman:Jeff Chang
intercontinental missiles during the year that triggered much anxiety in the region and the US. In terms of the financial markets, rate hike by the Federal Reserve, Europe’s tightening monetary policy, and the rise of Bitcoin intensified the pressure on the markets. In contrast to the global volatility, Taiwan stock market delivered stellar performance throughout the year.
  The Taiwan Stock Exchange Weighted Index closed the year at 10,642 points, up 1,389 points, that is 15.01% from the previous year. Moreover, the index stood above 10,000 point mark for 156 days, marking a historical record. Market fluctuation, total market capital, and transaction volumes performed outstandingly. Taiwan equity funds delivered positive returns throughout the year, with an average rally of 25.91% that outperformed the index.
  On the asset management front, the AUM of onshore funds grew from NTD2.3185trillion from the NTD2.1234 trillion in the previous year. Total AUM of discretionary investments also enjoyed a growth of NTD1.7499 trillion from NTD1.4287 trillion. Therefore, the AUM of Taiwan’s asset management industry in onshore funds grew from NTD3.5889 trillion to NTD4.1070 trillion, a growth of 14.44%. As for offshore funds, the amount held by domestic investors grew from NTD3.0781 trillion to NTD3.4959 trillion. Cumulative total AUM of onshore, offshore, and as well as investments amounted to NTD7.6029 trillion, a 14.04% growth from NTD6.6670 trillion the year before. It is safe to say that it has been a great year for the Taiwan asset management industry in 2017.
  In the past year, the Association has pursued the relaxation of various new business and measures namely wholly-owned subsidiaries of SITE may serve as general partner of a PE fund or may be appointed to manage private equity funds or introduce professional investment institutions or provide relevant services, as well as the use of seed fund mechanism for new fund launch and preliminary operations of SITEs. Furthermore, SICE may use automated tools (robo-advisor) to provide securities investment consulting services. We look forward to creating lucrative opportunities for the SITE and SICE industry.
  Furthermore, in terms of financial literacy and promotion of funds, the Association together with Taiwan Depository and Clearing Corporation (TDCC), Fundrich, and the Securities and Futures Institute (SFI) held various promotional events for Taiwan equity funds. First, by lower handling fees and subscription fees to increase the overall AUM and educate the public about the correct long-term investment attitudes in fund investment. Next, to encourage the youth to invest in the Taiwan equity funds, the Association held fund investment simulation contests in Universities and arranged industry mentors to guide the contestants in the practice of asset allocation, aiming to build a legacy in Taiwan fund industry.
  In conclusion, no matter in the development of new business or new products, or the growth of AUM as well as the promotion of financial literacy in funds, the industry saw much progress and delivered great results. What leaves room for improvement is the AUM growth of Taiwan equity funds. Despite the stellar performance of TAIEX and Taiwan equity funds, the AUM of Taiwan equity funds shrunk from NTD206.2 billion in 2015 to NTD176.8 billion in 2016. Even with the TAIEX maintaining its position above 10,000 points, the AUM of Taiwan equity funds remained at NTD173.6 billion. Moving forward, in order to boost the AUM of Taiwan equity fund and further encourage citizens to invest in Taiwan equity funds, the Association will promote the following works in the coming new year:
Continue to promote Individual Savings Account
  In recent years, under the adverse factors of popularity in passive investments and taxation, Taiwan equity funds continue to shrink in AUM. The stock market is now dominated by foreign investments that prefer a long-term buy-and-hold approach to weighted stocks, and in a capital market such as Taiwan with greater number of mid and small cap stocks, the lack of investments in these stocks has become a vicious cycle. Taiwan equity stocks pose significant influence on SMEs, and for the government to strengthen the SMEs and attract Taiwan businesses overseas to IPO in Taiwan, Taiwan equity funds must be livened first.
  Referencing the United Kingdom, Thailand, and Japan, the Association has begun to promote Taiwan Individual Savings Account (TISA) from 2016. It is recommended that the account be aligned with life insurance policies, by giving each person NTD24,000 in tax exemption when investing in Taiwan equity stocks (over 60% of the account invested in Taiwan equity stocks), with the condition that the invested amount is not redeemed within 5 years. The account aims to incentivize investments in Taiwan equity stocks, and at the same time promote wealth accumulation to families and individuals with a long-term view in mind. Moreover, the funds would benefit the long-term development of the SITE and SICE industry as well as the Taiwan economy as a whole.
Promote Member Choice under Taiwan labor pension
  For years, the Association has dedicated itself to promote member choice under Taiwan labor pension. Many suggestions have been sent to the competent authority and various industries with the aim to allow individuals to contribute to their labor pension through fund products available on the member choice platform, using regular saving plan that better meet their age, risk appetite and preference, and increase the opportunity to accumulate their pension.
  In order to develop the financial literacy in pension, the Association and TDCC, SFI, and Fundrich jointly launched the “Seminars on retirement investment”. The seminar takes part in two aspects, first is to host roadshow seminars on “Pension funds products and financial education” for the civil servant market to increase investment awareness and fund knowledge. Next, host a “fund investment simulation contest” for the public that allow the general public to experience risk control and fund trading first hand so as to promote retirement investment and begin planning for their pension reserve and retirement target.
  Over and above the development of the asset management industry and the education and promotion mentioned earlier, in 2018, the Association will continue to draft and propose the development of new products and business in response to the ever changing global financial markets and industry development. We hope to further connect asset management to the economy and our society, and bring about solutions to social issues and create a new ecosystem for the asset management industry.