Deutsche, Fubon attempt Taiwan bond fund cleanup

Is there a way to prevent a drop in bond fund NAVs - and hence another market crash - as interest rates go up?

Deutsche Bank and Fubon Securities Investment Trust Fubon SITE are finalizing a deal to pioneer a way to clean up Taiwan's precarious mutual funds industry, imperilled by huge amounts of investments by bond portfolios into structured notes that will lose money as interest rates go up. Market participants worry that falling NAVs could spark a market crash similar or worse to one experienced last summer when investors redeemed $8.8 billion in the space of just three days.

According to market sources, Deutsche and Fubon Site will formally propose a structure to the Financial Services Board - the securities regulatory branch under the Financial Supervisory Commission - by the end of...

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222