The Taiwan Monthly
Index Announcement
Taiwan Index Plus and Bloomberg Indices jointly launched the “Bloomberg TIP Taiwan and US Momentum Balanced Multi-Asset Index”, an Index Designed to Balance Risk Diversification with Steady Returns.
Taiwan Index Plus Corporation (“TIP”) launches the the Bloomberg TIP Taiwan and US Momentum Balanced Multi-Asset Index (“Balanced Index”)
on Feb. 24, 2025.
The Balanced Index is constructed using portfolio theory principles, incorporating the TIP Customized Taiwan Momentum Trend Index and the Bloomberg U.S. Treasury: 20+ Year Total Return Index Unh TWD. By blending equities and fixed income, the Balanced Index dynamically adjusts stock-bond allocations in response to different market conditions. This approach aims to optimize risk-adjusted returns and showcase the performance benefits of a balanced multi-asset strategy.
The Balanced Index is composed of the TIP Customized Taiwan Momentum Trend Index for equities and the Bloomberg U.S. Treasury: 20+ Year Total Return Index Unh TWD for bonds. The former index tracks the portfolio of forward-looking technology stocks with a blend of value, momentum, and representativeness; while the latter index, to whose USD-denominated counterpart four Taiwan-listed bond ETFs are currently linked, tracks long-duration, investment-grade U.S. Treasury securities. Jointly developed by TIP and Bloomberg with both firms’ expertise, the Balanced Index marks the brand new chapter of international collaboration for TIP in the field of multi-asset balanced index development.
The Balanced Index employs the 200-day moving average of the TIP Customized Taiwan Momentum Trend Index as the trigger to rebalance across four different market conditions:
1. Aggressive Scenario – Signalling a bullish trend, the equity allocation increases to 80%, while bonds are adjusted to 20%.
2. Stable Scenario – Indicating a potential reversal, both equities and bonds are equally weighted at 50%.
3. Conservative Scenario – Designed for risk mitigation, bond exposure is maximised at 80%, reducing equity exposure.
4. Special Scenario – Addressing extreme price deviations, the equity-bond ratio is maintained at 50%-50% to mitigate risks associated with over/undervaluation.
A back-tested simulation of the Balanced Index from March 2008 to December 2024 shows an accumulated return of 765.57% and an annualised return of 13.72%, significantly outperforming TWSE Capitalization Weighted Stock Index’s 765.57% and 10.37%.
While regulatory authorities further expanding access to passive multi-asset ETFs in 2025, TIP has actively pursued and will continue to drive international collaboration to develop new multi-asset indices. If commercialized, these indices could offer the investors broader investment solutions and facilitate the seamless implementation of ETF-based stock-bond allocations, enabling them to adapt to evolving market conditions.
For more details please refer to TIP’s official website: