Taiwan stocks hit record highs; Fubon Life investment return reaches 40%

Fubon Financial held its first-quarter earnings call on the 25th, disclosing the investment performance of Fubon Life. As of the end of March, total assets under management reached NT$5.25 trillion, with a total investment return, including FVOCI disposal gains, of 6.46%. The allocation to domestic stocks was increased to 9.8% in the first quarter, achieving an annualized return of 40.18%. Fubon Financial's net profit after tax for the first quarter was NT$33.55 billion, with earnings per share (EPS) of NT$2.4, ranking first in the industry. Fubon Life's net profit after tax for the first quarter was NT$15.12 billion, and its adjusted profit, including FVOCI (fair value through other comprehensive income) equity instrument disposal gains, reached NT$47.29 billion, a record high for the same period. Fubon Life also disclosed its investment portfolio results. Total assets increased from NT$5.16 trillion on January 1 to NT$5.25 trillion at the end of March. The largest component was foreign bonds at 51.9% (4.01% return), followed by domestic bonds at 15.9% (3.15% return), domestic stocks at 9.8% (40.18% return), foreign stocks at 5.4% (10.06% return), and cash and cash equivalents at 6.6% (1.1% return). Institutional investors questioned the shift in allocation between domestic and foreign stocks. Fubon Life explained that returns on both domestic and foreign stocks exceeded market averages, and they adjust dynamically based on market conditions. Fubon Financial President Han Wei-ting expressed strong confidence in Taiwan's AI industry, particularly the hardware sector, noting that this is why their domestic stock investment ratio is higher than peers. However, he noted that Taiwan stocks have risen significantly in the short term, so risk management remains a priority. Regarding hedging strategies, Fubon Life noted that foreign exchange operations were successful last year, and the foreign exchange valuation reserve reached NT$147.4 billion by the end of March, the highest in the industry. The Contract Service Margin (CSM) balance reached NT$414.7 billion by the end of March, a 2.8% quarterly increase. Fubon Life pointed out that the growth in CSM is primarily driven by new contracts.