Taiwan’s largest equity exchange-traded fund is on track for record inflows this month, as domestic investors defy the global turmoil sparked by the Iran war and pile into the technology-heavy product.
The Yuanta/P-shares Taiwan Top 50 ETF listed on the Taiwan Stock Exchange has lured a net NT$140 billion so far in March, eclipsing the previous all-time high of $2.9 billion in November, according to data compiled by Bloomberg. That’s even as foreign investors have been sellers this month.
Booming demand from local investors — who are seeking higher returns than traditional bank deposits and insurance policy-tied instruments — has made Taiwan one of Asia’s hottest ETF markets in recent years. Interest in the Top 50 ETF has surged also due to a relentless rally in the shares of Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker that is a primary beneficiary of a global race to build infrastructure for artificial intelligence.
TSMC’s stock, which accounts for over 60% of the ETF’s weighting, more than doubled over the past year or so to reach an all-time high in late February. While it has fallen this month amid a global equity selloff triggered by the Middle East conflict, some money managers say Asia’s high-end technology shares offer the best hedge against the prospect of a prolonged war.
The inflows into the ETF signal how domestic demand is making the product resilient even in times of global turmoil. Money has flown in even as Taiwan’s benchmark Taiex index has fallen nearly 6% in March. Global funds have sold $23.1 billion of local shares so far this month.
What Bloomberg Intelligence Says
“Flows could continue as investors bargain hunt amid the volatility from the Iran War. For Taiwan, investors are specifically focused on tech names such as semiconductors and AI.”
While Taiwan’s $260 billion ETF industry is dominated by local firms, global asset managers are boosting their presence fast to tap into the rising demand. JPMorgan Asset Management earlier this month said it was issuing its first Taiwan-focused wealth management product in more than a decade.
“Despite near-term volatility driven by AI profitability concerns, investors remain broadly constructive on Taiwan — with passive large-cap equity ETFs continuing to capture inflows into mega-cap semiconductor names,” said Yoon Ng, head of AC asset management growth solutions at Broadridge Financial Solutions.
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