TAIPEI (Taiwan News) — Taiwan’s stock exchange-traded funds have continued steady growth this year, with total assets recently exceeding NT$3.5 trillion (US$115 billion) for the first time, CTEE reported Sunday.
An ETF is an investment fund issued by management firms that tracks a specific market index. For example, the Yuanta P shares Taiwan Top 50 ETF (0050) invests in the 50 largest publicly listed Taiwanese companies, according to Sinotrade.
By purchasing ETF shares, an investor gains partial ownership in the underlying companies. Profits, known as dividends, are then returned to shareholders in cash or stocks.
This year, Taiwan’s 75 stock ETFs added NT$699 billion in assets, supported by repeated new highs in the stock market index. While the ETF market grew nearly 70% in 2023 and 90% last year, this year’s 24% growth by far reflects a more moderate pace as the market base expands.
A key feature of the year's growth is that inflows are concentrated in a few top-performing ETFs. The three largest gainers, the 0050, Yuanta P shares Taiwan Dividend Plus ETF (0056), and Capital Tip Customized Taiwan Select High Dividend ETF (00919), together attracted NT$526 billion, accounting for nearly 80% of the total increase.
Capital Investment Trust’s Taiwan stock ETF research team said September’s interest rate cuts encouraged capital inflows, pushing Taiwan’s stock market to new highs. Allianz Taiwan’s ETF team noted that while major weighted stocks recently led the market, signs of profit-taking remain as investors are less willing to chase new highs.
Looking ahead, analysts said stock selection will be crucial. A well-structured portfolio can enhance returns.
Long-term strategies may focus on high-quality AI companies and related sectors such as robotics, communications, and consumer electronics. At the same time, investors may keep exposure to traditional firms with low valuations and higher interest rates.
AI supply chain stocks, previously strong performers, have seen some pullback, with funds shifting toward lower-valuation options. Despite recent market corrections, corporate fundamentals and profit forecasts for next year have been revised upward, supporting a continued overall bullish trend.
