Taiwanese investors don't fully grasp bond fund risks

There is a clear mismatch between the goals of Taiwanese bond-fund investors and their allocation to these assets, according to research by Janus Capital.

Given major issues for Taiwanese bond funds in the past -- such as substantial redemptions in 2004 -- one might think investors would be well versed in such instruments. But that doesn't seem to be the case.

A survey released in early November by US asset manager Janus Capital found that investors in Taiwan do not properly understand the bond fund asset class and as a result often buy them for the wrong reasons.

The aim of the survey was to examine why bond fund investors decide to invest, their key investment criteria and their level of understanding of bond funds, ...