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Taiwanese investors turn to local ETFs amid semiconductor euphoria
Taiwan’s exchange-traded fund (ETF) market is becoming increasingly driven by domestic equity funds because of the booming semiconductor industry and changing investor preference, according to an official at the local bourse.
Equity and bond.
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Taiwan Amp Rsquos Exchange Traded Fund Etf Market Is Becoming Increasingly Driven By Domestic Equity Funds Because Of The Booming Semiconductor Industry And Changing Investor Preference , According To An Official At The Local Bourse Equity And Bond Etf Assets In Taiwan Grew 5 Year On Nt 1 8 Trillion Us 63 Billion 2020 Thanks Significant Flows Into Thematic Sector Funds , Says Albert Chou , Vice President Of Corporate Planning And Strategy Department At The Taiwan Stock Exchange Twse Amp Ldquo Local Investors Had Growing Demand For Equity Etfs With Global Rally Stemming From Major Governments Rsquo Covid 19 Stimulus Packages , Amp Rdquo He Says In An Interview With Asia Asset Management Retail Investors Particular Are Favouring Thematic Etfs , Which Give Them Access To Fast Growing Sectors Such As Environmental , Social And Governance Esg , 5g Telecommunications , And Electric Vehicles Taiwan Amp Rsquos Economy Was Among The Handful That Expanded Last Year When Most Others Were Buffeted By Coronavirus Pandemic Gross Domestic Product Grew 2 98 , Galvanised By Robust New Technology Industries Taiwan Semiconductor Manufacturing , The Island Amp Rsquos Largest Chip Maker , Accounts For Over 50 Of Global Production Amp Ldquo The Reallocation From Foreign To Domestic Assets Is Also Reflected In Wax And Wane Between Etfs Tracking Taiwanese Stocks Offshore , Amp Rdquo Chou Says Assets Of Domestic Equity Etfs Soared 85 Year On To Nt 357 Billion In 2020 While Foreign Declined 15 117 Overall Twse Listed Rose 561 From 428 2019 Currently Account For Around 1 Taiwan Rsquos Stock Market Valuation Most These Are Funds As Bond The Taipei Exchange Also Attributes Etf Growth Partly Fact That Bourse Upgraded Its Trading System March Previous Call Auction Which Matched Orders Buyers And Sellers Five Second Intervals He New Continuous Is More Efficient Line With Other Asian Bourses , And That The Upgrade , Together With The Implementation Of Intraday Odd Lot Trading In October 2020 , Has Attracted More Active Investor Participation And Propelled Etf Trading Volumes Bond Etfs Changing Sentiment About Us Government Bonds Weighed On Taiwan Amp Rsquos Last Year Chou Says Many Investors Consider Treasuries To Be Less Attractive As They Believe The Federal Reserve Will Have Little Room For Further Rate Cuts Ldquo Market Perception Led Redemptions Of Nt 140 Billion From Eight Fixed Income , Amp Rdquo He Says Bond Etf Assets , Which Surged From Nt 376 Billion In 2018 To 1 34 Trillion 2019 , Dropped To Nt 1 26 Trillion In 2020a Regulatory Clampdown On Bond Etfs Also Cooled Taiwanese Life Insurers Amp Rsquo Appetite For The Funds Insurance Companies Had Previously Been Eager Invest Asa Way Circumvent 65 Limit Their Total Foreign Asset Allocation But 2019 , The Financial Supervisory Commission Fsc Decreed That An Investor Could Only Hold Up To 50 Of Etf Has Over Nt 3 Billion Assets At Initial Public Offering , And Up To 70 In Smaller Funds , In Order To Avoid Concentration Risk Prior That , An Investor Could Hold As Much 100 Of Etf At The Ipo Regulator Also Banned Insurers From Buying Funds Comprising Bonds With Low Credit Ratings These Measures Amp Ldquo Have Subdued Investors Rsquo Appetite For Bond Etfs And Prompted Significant Capital Withdrawals Rdquo , Chou Says The Total Number Of Equity And Bond Etfs Dropped To 214 Last Year From 217 In 2019 , With Only 12 New Listings , While 15 Were Delisted Chou Says Etf Managers Cautious About Launching New Funds Amid Market Volatility Triggered By The Coronavirus Pandemic He Expects Thematic And Sector Etfs Tracking Green Energy Or High Dividend Stocks To Continue Be Bright Spots This Year For Highly Volatile Futures Like Crude Oil ,