High distribution payout, good performance and overall rebate term drive the Top 10 most popular offshore fund rankings in 2018....
The most popular offshore funds mean funds with the most net inflow in 2018. During 2018, a volatile market, investors’ preference is impact. Only 2 are equity funds, others are balanced or fixed income funds. Relevantly, high dividend payout, performance and Fund house campaign policy in sales channel drove the ranking.
Higher Dividend Payout, Most Efficiency
Notably, many Taiwan fund investors are income seekers especially retiree investors are looking for asset with low volatility and higher monthly distribution payout.
The top 4 most popular funds with highest net inflow are famous for its high annualized dividend rate, they are Allianz Income and Growth fund, Templeton Emerging Markets Bond Fund, Amundi Fds II Emerging Markets Bond Fund and Neuberger Berman Emerging Markets Debt Local Currency Fund.
The average annualized dividend rate payout from the top 4 most popular funds in US-dollars-denominated share class are 10.09% and South Africa rand-denominated share class are 15.5%. Amundi Fds II Emerging Markets Bond Fund even pay the dividend to South Africa rate-denominated share class with 20.20% annualized rate in November and December when the NAV declined. The higher dividend rate makes the US$320Mn gross sales in Q4’18.
Higher dividend payout, more efficiency also changes the ranking of total AUM hold by Taiwan investors in 2018. Allianz Income and Growth hit the 1st place and AB FCP I-Global High Yield Portfolio Fund moved to the 2nd after 10 and more years at the 1st place.
Allianz Income and Growth Funds won the Top 1 place in during Q4
Allianz Income and Growth Funds had been very popular in Taiwan since its first launch in 2014, attract to investors by its high dividend payout. The total of AUM hold by Taiwan investors currently is US$12.11 billion and the second one, AB FCP I-Global High Yield Portfolio Fund with US$11.94 billion had been at the 1st place for 10 and more years but Allianz Global Income fund had only taken 3.5 years since 2014.
High yield bond fund AUM declined along with the index fall
The high yield bond fund used to be the most popular fund type appeals Taiwan investors with the higher dividend payout. However, the Global High Yield bond index fall around 5% in 2018, investors began to pull their money from the high yield bound fund. The total of high yield bond fund AUM hold by Taiwan investors declined in 2018 by 22% from US$31 billion to US$24 billion. The YoY% of total of over the total of offshore fund is from 27% to 23%.
Better Performance, more Money buoyed
Although the long-term performance is better than short-term performance to evaluate mutual fund, retail investors are still easy to make an investment decision by the short-term performance. The higher the NAV, the more investment and the lower the NAV, the more redemption.
Most of asset performed negatively in 2018. According to Morningstar report, the average annual return of registered equity fund is -14.80% and fixed-income fund -6.54%. A fund could deliver positive return could made money buoy. Includes JPM Global Government Bond Fund, AB Global Bond Portfolio Fund, AB Global Plus Fixed Income Portfolio Fund and M&G Optimal Income Fund. Especially M&G Optimal Income fund launched in Taiwan during Q2, 2018 a Luxembourger-domiciled and multi-asset strategy with 1.1% return in NTD pulled in US$176.57Mn at 10th place.
Overall rebate term impacts
Besides the dividend payout and performance, how active a fund house run incentive program with their sales channel also affect the gross sales volume.
The incentive program includes to increase the rebate proportion of AUM trailer, give rebate of the gross sales amount, sponsor the marketing promotion or training activities.
According to the disclosure announcement from key sales channels (CTBC, Cathay, Fubon.…) about the recent incentive scheme with the fund house, most of the top 10 funds are from the fund house provide more incentive scheme than other fund house.
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