Strategic Group Analysis on Investment Trust Industry of Taiwan
Date Issued
2006
Date
2006
Author(s)
Chen, Ming-Hsin
DOI
zh-TW
Abstract
In order to make Taiwan’s financial market more sophisticated and mature, in 1983 the government encouraged six domestic banks to establish “International Investment and Trust, Ltd.,” and permitted foreign asset management companies to enter Taiwan’s market. This marked the beginning of the investment trust industry in Taiwan. After 20 years of development, the industry is now in an era of intense competition.
In 2005, the government required all investment trust companies to deal with their bond funds’ structured bond problems. In facing the problems, all investment trust companies risked severe losses. Beginning in 2006, the size of bond funds shrank dramatically, significantly reducing the profits of investment trust companies. This resulted in investment trust companies seeking alternative investment products to maintain profitability and ensure their survival.
History shows that in a crisis that causes industry consolidation, change in ownership is more common than withdrawal from the market. Currently the investment trust industry is facing a critical challenge it has never before experienced. Competitive advantages and positions are shifting among investment trust companies, and strategies are changing as well.
This research first identifies variables affecting the investment trust industry and attempts to classify investment trust companies according to these variables for 2000 and 2005. Changes in the strategic position of investment trust companies are observed between these two periods and compared with the current market conditions and the understanding of industry specialists. Accordingly, we will submit strategic proposals to individual investment trust companies in different market positions.
Finally, this research obtains the following conclusion after positive research:
First, after interviewing with expert of industry to obtain strategic parameters, they can be run for grouping companies of investment trust industry.
Second, the proportion of the bond fund is key issue for any company of investment trust industry, it is really influence company's making a profit and industry's competitiveness.
Third, the most competition of companies, they still rely on the fact that there is financial holding company to backup or the foreign investment company to support.
Fourth, besides the above mentioned, the niche companies are still survival in industry, the key point is to develop innovative products and obtain investors’ trust.
Fifth, verify the equity fund of 2005, its two -year performance and Sharp value, have difference among different one group of strategic groups. It sould make differentiation in industry when investment trust company raise its performance of equity fund.
Sixth, theories of strategic group can be applied in this industry.
Subjects
投信產業
策略群組
集群分析
Investment Trust Industry
Strategic Group
Cluster Analyst
Type
other
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