Investment objective

 

The Fund's investment objective is to seek long-term capital appreciation primarily through investments in equity securities listed in Taiwan.

Fund facts	(as at 02/29/16)
Net asset value per share	$16.80
Market price	$14.82
Premium/discount	-11.79%
Total net assets	$ 138.14 m
Market cap	$ 121.88 m
Fund statistics
Investment adviser (date of appointment)	JF International Management, Inc. (07/22/14)
Fund manager	Shumin Huang
Listed	NYSE
Launch date	12/23/86
Shares outstanding	8,224,330
Last dividend (Ex-dividend date)	$2.6332 (December 26, 2014)
Benchmark	TAIEX Total Return Index
Fund codes
Bloomberg	TWN
Sedol	286987895
CUSIP	874036106
ISIN	US8740361063

 

*	In US Dollar terms

A	TAIEX Total Return Index (prior to January 1, 2003, TAIEX Index)

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Review

 

The TAIEX total return index (TAIEX) rose 4.4% in February and recouped the sharp losses in January. The market rebounded following the Chinese New Year holiday on the back of bargain hunting and the rally in the price of crude oil. Most sectors in the TAIEX ended in positive territory in February except for the tourism and automobile sectors. Notably, we saw the strongest performance from the materials sector, including the steel and cement names, which have corrected significantly over recent months. The technology sector outperformed slightly, mainly driven by large cap names on signs of restocking demand from Apple. The Fund underperformed the TAIEX by 2.1% in February.

 

Positioning and Contributors

 

Renewable energy and auto parts companies in the electric & machinery and other electronic sectors were the major contributors to the Fund in February. In contrast, the textile sector saw pressure from profit-taking, including consumer discretionary companies that had previously outperformed. The Fund took the opportunity to switch between positions in the Apple supply chain and increased the active bets in names with high convictions. Overall, the Fund remains underweight in the telecommunications, materials, and financials sectors.

 

Outlook

 

Market sentiment in Taiwan seems to be improving in the near term with signs of recovering crude oil price, loosening monetary policy in China and the expectation that corporate earnings will bottom-out in the first quarter of 2016. Net buys from foreign investors into the Taiwan equity market seem likely to continue with investors focusing on large value stocks in the near term. We believe that companies with long-term secular-growth opportunities will return to the radar screens of investors with longer investment horizons. The Fund continues to focus on quality companies with strong growth profiles.

 

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Source: MSCI. Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express of implied warranties or representations with respect to such data (or the results to be o bta ined by the use thereof), and all su ch parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of s uch data. Without limiting any of the foregoing, in no eve nt sha ll MSCI, any of its affiliates or any thir d party involved in or related to compiling computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI's express written consent.

Important Information

 

This document is issued and approved by JF International Management, Inc. ("JFIMI"), as investment advisor of The Taiwan Fund, Inc. (the ''Fund''). JFIMI is an investment advisor registered with the US Securities and Exchange Commission. Certain information herein is believed to be reliable but has not been verified by JFIMI. JFIMI makes no representation or warranty and does not accept any responsibility in relation to such information or for opinion or conclusion which the reader may draw from this newsletter.

 

The Fund is classified as a diversified investment company under the US Investment Company Act of 1940 as amended. It meets the criteria of a closed end US fund and its shares are listed on the New York Stock Exchange. JFIMI has been appointed investment advisor to the Fund.

 

This newsletter does not constitute an offer of shares. Closed-end funds, unlike open-end funds, are not continuously offered. After the initial public offering, shares are bought and sold on the open market through a stock exchange. JFIMI, its ultimate and intermediate holding companies, subsidiaries, affiliates, clients, directors or staff may, at any time, have a position in the market referred to herein, and may buy or sell securities, currencies, or any other financial instruments in such markets. The information or opinion expressed in this newsletter should not be construed to be a recommendation to buy or sell any security, including the securities, commodities, currencies or financial instruments referred to herein.

 

Portfolio holdings are subject to change daily.

 

It should not be assumed that any of the securities transactions or holdings discussed here were or will prove to be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of the securities discussed herein.

 

Investing in the Fund involves certain considerations in addition to the risks normally associated with making investments in securities. The value of the shares issued by the Fund, and the income from them, may go down as well as up and there can be no assurance that upon sale, or otherwise, investors will receive back the amount originally invested. There can be no assurance that you will receive comparable performance returns. Movements in foreign exchange rates may have a separate effect, unfavorable as well as favorable, on the gain or loss otherwise experienced on an investment. Past performance is not a guide to future returns. Accordingly, the Fund is only suitable for investment by investors who are able and willing to withstand the total loss of their investment. In particular, prospective investors should consider the following risks:

 

Discretionary investment is not risk-free. The past operating performance does not guarantee a minimum return for the discretionary investment fund. Apart from exercising the duty of care of a prudent adviser, JFIMI will not be responsible for the profit or loss of the discretionary investment fund, nor guarantee a minimum return.