The Analysis of Internationalization for Taiwan Securities Investment Trust Sector －A Study on Entering Mainland China Fund Market

Abstractue to the tough competition in Taiwan Fund Industry, Securities Investment Trust Companies are well aware of internationalization. This study proposed two possible approaches for fund industry to develop national markets: One is investment portfolios internationalization; and the other is investment capitals globalization. By using this framework, based on Tang’s (2003) “growth model” and Hill et al.’s (1990) “entry model”, the study investigated the business models of international fund management institutions and the entry mode of China Fund Market for Taiwanese companies. Several conclusions are summarized as the following: irst, International fund management institutions used vertical integration to enlarge the asset volume, and constructed multi-boutique investment platforms. The single-brand institutions which focused on the product innovation established joint venture with global banking channels. Continuing duplicating and leveraging the investment platforms, international institutions earned the reputation and the strength on international mutual funds. By a distribution localization strategy, the institutions easily communicated with global investors. For global management, the product strategy of those institutions was to list mutual funds with either stock or bond portfolios.econdly, for entering China fund market, except the government’s legal restrictions and the unsigned MOU, Taiwan fund management companies are suggested to focus on the following two dimensions. In the dimension of investment portfolios internationalization, Taiwan companies have to enlarge asset volume so that the funds can be qualified by China QFII .In the dimension of investment capitals globalization, the result suggest the resource integration, the use of insurance sectors as the key access.Before the breakthrough of legal problems, Taiwan companies should develop niche market and products, and pay attention to China stock market. Finally, although China market seems to have the prosperous potential, there are still several risks for Taiwan enterprises. For example, the effect of the adjustment and transformation of economic structure on capital market, and the uncertainty of China government policy, should be all taken into considerations by Taiwan enterprises.