| Summary: | 碩士 === 國立中山大學 === 高階經營碩士班 === 94 === As the majority of trading volume in the Taiwanese stock market is created by retail investors, the Taiwanese government has been aiming to promote professionalism by channelling the money from retail investors into the hands of professional asset managers. The Executive Yuan passed the third reading of the Amended Draft of the Securities & Exchange Law on the 30th June 2000 (Article 18-3, the Securities & Exchange Law) and the Securities & Futures Bureau approved on 5th January 2001 that investment & trust and investment consulting companies may offer services in the discretionary investment business.
The discretionary investment business in, in nature, similar with the set-up of mutual funds; however, the discretionary investment business offers bespoke characteristics and specifications catering to specific requests of individual investors. The customization in the scope of investment and underlying targets is made possible to satisfy differing needs of individual clients. As institutional investors are sophisticated in mapping out investment strategies and dedicated in their fundamental analysis of macroeconomic and political situations, industry trends and financial reports of listed companies, they are able to better allocate assets and select the stocks.
At first, this research reviews all the relevant literature and looks into the details of the legal framework governing the discretionary investment business. This paper argues that the originally well-intentioned regulations in fact, at least to some degree, hamper the development of the discretionary investment business. Then this research paper examines the characteristics, basic structure and the legal framework of the discretionary investment business, probes into the Taiwanese asset management market and uses Grand Cathay Securities Investment Trust as a case study, as an attempt to shed light to the future development of the discretionary investment business in Taiwan.
In this case study, the author investigates the strategies employed by Grand Cathay Securities Investment Trust against the backdrop of the business environment and the market competition by deploying scenarios analysis, SWOT analysis and the Porter’s competitiveness framework (cost leadership vs. product differentiations). The scope of the strategic considerations covers 4P, i.e. price, product, place and promotion.
Finally, this research concludes that there are two competitive strategies in this market, i.e. cost leadership and product differentiations and summarize the operational, marketing and operational implications of these two strategies.
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