The labor funds managed by the Ministry of Labor's Bureau of Labor Funds brought in over NT$450 billion (US$16.22 billion) in profit in 2021 as global financial markets performed well despite the COVID-19 pandemic, the bureau said on Monday.
The labor funds managed by the bureau -- the Labor Pension Fund, the Labor Retirement Fund, Labor Insurance Fund, the Employment Insurance Fund, the Arrear Wage Payment Fund, and the Occupation Incidents Protection Fund -- earned NT$451.11 billion in profit, resulting in a return rate of 9.65 percent.
The aggregate holdings of these labor funds totaled about NT$5.11 trillion as of the end of 2021, the bureau said.
The new Labor Pension Fund, launched in July 2015, compared with the original Labor Retirement Fund, which has been in place since 1984, earned a profit of NT$283.68 billion, which was a return of 9.66 percent.
Being the largest fund managed by the bureau with about NT$3.15 trillion in assets, the pension fund's profit accounted for more than 60 percent of the total profit posted by the labor funds.
According to the bureau, the 12.25 million workers who have signed up with the new Labor Pension Fund are expected to pocket about NT$23,000 on average for 2021.
In 2021, the global economy received a boost from monetary and fiscal stimulus measures adopted by many countries to fend off the impact from the COVID-19 pandemic, the bureau said.
In the past decade, the labor funds recorded an average 5.85 percent in return. In the recent five years, the average return hit 7.09 percent.
Judging from the returns in such a short term, the labor funds have provided a stable performance, the bureau added.
In 2021 alone, the bureau said it allocated about 20 percent of the total investments of these labor funds to the local equity market, and raked in a return of 30.6 percent, beating the Taiex, the weighted index on the Taiwan Stock Exchange, which rose by 23.66 percent, the third-largest rise in the local equity market's history.
The strong showing by the Taiex pushed up the local market capitalization by NT$11.38 trillion to NT$56.28 trillion in 2021.
As of the end of 2021, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, made up 25.73 percent of the new Labor Pension Fund's total investments in the local equity market, making it the largest holding in the fund's local equity investment portfolio.
Power management solution supplier Delta Electronics Inc. was second at 3.15 percent, ahead of telecom services provider Chunghwa Telecom Co. at 3 percent, Fubon Financial Holding Co. at 2.94 percent, printed circuit board maker Unimicron Technology Corp. at 2.92 percent, smartphone chip designer MediaTek Inc. at 2.84 percent, Cathay Financial Holding Co. at 2.82 percent, iPhone assembler Hon Hai Precision Industry Co. at 2.64 percent, contract chipmaker United Microelectronics Corp. at 2.59 percent, and dynamic random access memory chip producer Nanya Technology Corp. at 2.58 percent.
Looking ahead, the bureau said it will diversify the investment portfolios of these labor funds to shun risks and post a stable return during a time when growing inflationary pressure worldwide has prompted many major central banks to tighten their monetary policies.
Source: Focus Taiwan News Channel