About SITCA > Chairman

    Although the world was impacted by the COVID-19 pandemic that threatens economic growth, the global stock market has made great strides, frequently setting new records. The Taiwan stock market was no exception. Taiwan stock index fell to 8,523 points during the pandemic panic in March, and then followed the international stock market rebound till the last trading day of the year closed at 14,732 points. The index continued to hit record highs, with a year-round increase of 22.8%, a stellar performance among the international markets.

    In terms of the SITE and SICE industries, driven by global capital fluctuations, the size of onshore funds in 2020 increased from NTD4.0045 trillion at the end of 2019 to NTD4.5232 trillion, and the scale of discretionary investment increased from NTD2.0075 trillion to NTD2.4337 trillion. The total asset under management (AUM) of the SITEs and SICEs increased from NTD6.0762 trillion to NTD7.0238 trillion, an annual increase of 15.77%. As for offshore funds, the amount held by domestic investors increased from NTD3.6472 trillion at the end of last year to NTD 3.6928 trillion, with anannual growth rate of 1.25%. The cumulative AUM of domestic, offshore, private placement funds, as well as discretionary investment business amounted to NTD10.7166 trillion, a total increase of 10.32% over the previous year.

    To welcome the year of the golden ox - 2021, the Association will promote the “Opening of Member-Choice Investment”, Taiwan Individual Savings Account (TISA), and the Real Estate Investment Trusts (REITs) as the three major tasks in the hope that friendly investment and savings mechanism required in the environment of the aging society will be established to assist the public in establishing a good financial management concept. At the same time, it will bring vitality to the asset management industry, activate Taiwan’s capital market for greater visibility on the international stage.

Continue to Promote Member-Choice Investment Mechanism for Labor Pension in Taiwan

    The new labor pension system has been implemented for more than 15 years, but the rate of labor pension voluntary contribution is still less than 10%. For this reason, SITCA will actively promote the member-choice investment platform this year to strengthen the second pillar in the pension system - occupational pension, so that the public can happily enjoy their retirement life.

    There are two main advantages of opening up the member-choice investment platform for the pension fund. First, it is expected to increase the rate of labor pension voluntary contribution under the new labor pension system, as most of the public prefer to invest independently. A survey of fund investment attitude conducted by SITCA in 2020 shows that more than seventy percent of the respondents who apply to the new labor pension system and have investments in mutual funds expressed their willingness to participate in the member-choice investment.

    Second, it boosts the rate of return, the performance observed by the private school retirement savings and the Good Retirement project from the FundRich Securities are perfect examples. According to the information on the website of the Private School Retirement Savings Management Committee, since March 2013, till the end of 2020, the conservative, stable and active cumulative return rates of private school retirement savings were 17.13%, 56.84% and 59.91%, respectively. This is equivalent to an annual investment rate of 2.14% ~ 7.49%. In terms of the Good Retirement project of FundRich Securities, since the establishment of nine fund listings for more than a year, three fund listings have return rates over 12%, three fund listings over 20%, and the best fund listing performance exceed 30%. The overall performance was exceptional.

Promote TISA to Provide Tax Concessions to Drive the Public to Make Retirement Savings

    Tax incentives can help the public to develop investment and financial management habits! Savings and insurance are good examples. In 1970, the government promoted the National Savings campaign and advocated saving habit in elementary and junior high schools. Each person deposits NTD1,000 a month and exempt from interest income tax. This has allowed Taiwan’s saving deposits to grow by 263% in three years. Another example is that insurance has an annual tax allowance to NTD24,000, coupled with the industry’s active promotion of protection awareness, making Taiwan’s insurance penetration ranked first in the world, and the insurance rate of the public is nearly 250%.

    Due to the advent of an aging society, many countries have begun to provide the Individual Savings Account (ISA) mechanisms or similar systems to encourage people to make medium and long-term investment with tax concessions to supplement the insufficient national first and second pillar pensions. It is hoped that the government can also revise the income tax law in accordance with the tax incentives for savings and insurance. Under the current enumerated deductions, the “Investment Enumerated Deduction” has been added, with the deduction limit of NTD24,000. Through tax incentives, the public is encouraged to develop the habit of making medium and long-term investment, reducing the financial pressure on the government to pay for pensions, and it can also vitalize Taiwan’s capital market.

Promote the Market Development of Real Estate Investment Trusts (REITs) Commodities and Boost the Property Market

    In recent years, the SITEs have actively issued ETFs and IPOs, the amount and the transaction volume have increased significantly, which has led to a major leap in the scale of Taiwan’s ETFs, and the ETFs have become an important investment tool for the public. This year, the Financial Supervisory Commission (FSC) will make deliberations to amend the Securities Investment Trust and Consulting Act. In addition to the trust industry, SITEs can also issue real estate investment trust funds in the future. The Association will, in line with the government policies, support and promote the development of REITs market. It is hoped that it will flourish like the ETF market and drive further development of Taiwan’s capital market.

    The vigorous development of REITs will vitalize the use of the property and meet the demands for construction funds and become the backbone to support the real estate economy that will inject growth force into Taiwan’s capital market and economic development. Three major benefits are to be expected. First, to provide the public with fixed-income investment channels and increase retirement saving. Second, to vitalize the capital market and drive the development of real estaterelated industries. Third, to promote economic development and employment growth. According to the EY (Ernst & Young Global Limited) research commissioned by Nareit showed that United States REITs directly employed 276,000 full-time employees, and invested USD55.3 billion in maintenance and improvement of real estate / real estate land projects in 2018. At the same time, it also contributed 2.4 million full-time employment opportunities and USD148.2 billion in labor income to the overall REITs industry.

    In addition to the above-mentioned key promotion projects, the Association will continue to promote participation in the Asia Region Funds Passport (ARFP), discretionary robo-advisor services and make deliberations on other new commodities and new businesses. We look forward to work hand-in-hand with all the member companies to create diversified business opportunities for the industry.