(Bloomberg) — Taiwan’s largest pension fund has reduced some of its US currency exposure amid heightened market volatility and a broader global reassessment of dollar assets.
The Bureau of Labor Funds, which manages nearly NT$9 trillion ($286 billion) in retirement and insurance assets, recently lowered dollar-denominated equity and fixed-income exposures in mandates overseen by external asset managers, according to Astraea Lin, director of BLF’s Foreign Investment Division. She didn’t provide specific figures.
“The de-dollarization trend is slowly taking place, so we will diversify across currencies and assets to minimize the impact of any single market or currency on the fund’s returns,” Lin said in an interview in late April. That said, “the US dollar still shows strong resilience globally, with clear advantages in terms of market depth and liquidity, and there is currently no clear alternative,” she added.
BLF’s move underscores a broader shift among some global institutions — including pension funds and central banks — to trim exposure to dollar assets as investors grow wary of the unpredictability of US President Donald Trump’s policy shifts. The Bloomberg Dollar Spot Index has extended losses this year after sliding 8.1% in 2025, its worst performance in eight years.
The BLF allocates more than half of its assets overseas, primarily into equities and fixed income. For the past two decades, it has largely awarded foreign mandates in US dollar terms. As of March, NT$3.66 trillion of the fund’s overseas investments were managed externally, out of total offshore holdings of NT$5.07 trillion, according to Bloomberg calculations based on the fund’s disclosures.
“Our exposures to dollar assets are currently relatively low compared to the benchmarks, but not by far,” Lin said, citing the MSCI All Country World Index and the Bloomberg Global Aggregate Bond Index.
The BLF is also seeking to support Taiwan’s ambitions of making its chip-making economy a regional financial hub. In its latest two mandates, totaling about $4.6 billion, the fund asked participating managers to submit more detailed long-term plans for developing the local capital market.
The plans, which are expected to include considerations such as setting up offices in Taiwan and expanding local staffing, are now part of the evaluation criteria for winning mandates, according to Lin.
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