The trade dispute between the US and China, Brexit turmoil and multiple geopolitical issues have been weighing on financial markets this year. However, given quantitative easing policies of US and European major central banks followed by emerging country rate cuts, ample liquidity boosted stocks, bonds, real estate and infrastructure assets broadly.

　　The international economic forecasting institutions, including the OECD and the IMF, projected a weakest world economic growth since financial crisis for this year. As we move into 2020, an economic slowdown is foreseen with global growth estimates between 2.9% and 3.4%, but not exactly a recession in light of monetary easing from major central banks and fiscal stimulus to offset economic deceleration in certain countries. Nevertheless, uncertainty around trade tension, US president election, Brexit and Middle-east geopolitical conflicts will still affect financial markets and buoy volatility.

　　Amid international trade disturbance, Taiwan in fact benefited from order diversion effect, scheme for welcoming overseas Taiwanese business back to invest and domestic demand growth. The monitoring indicator for October stayed as Yellow-Blue, leading and coincident indicators continuously rose and PMI for November showed the second month of expansion, indicating a stabilizing home economy. With the prospect of the government optimizing investment environment, capital expenditure in advanced manufacturing process by semi-conductor industry, overseas Taiwanese business increasing domestic production and sound consumer statistics, fundamentals of the stock market shall be well supported. That said, uncertainty around protectionism, western central bank policies and geopolitics shall be closely monitored.

　　Facing the various risks in financial market, the Bureau of Labor Funds, BLF for short, will continue diversified universal investment allocation. Domestically, the BLF shall keep balanced positioning based on industry development trend and investment value and utilize different mandate types tailored to the market, aiming to seize investment opportunities in market fluctuation. Regarding foreign investment, aside from constructing diversified portfolios with strategic indices, the BLF shall strategically broaden alternative investment which has lower correlation with traditional equity and bond assets. The BLF will keep using both benchmark-aware and absolute return types of mandates. With varied investment style of managers, risks shall be well diversified and returns be enhanced.

　　The BLF always targets the long-term stability of returns in its investment practice. As the labor funds growing, the BLF shall continue its approach to strengthen global diversified investment as well as risk management, keep up with dynamics in financial markets and maneuver portfolios nimbly to ride out market volatility and generate solid long term risk-adjusted returns for all the labors’ financial security and wellness in retirement.