ETFs help fuel 25% jump in Taiwan fund assets in six months

The total onshore assets of Taiwan fund firms grew 24.8 per cent to NT$8.41tn ($257.41bn) in just six months as issuers of domestic equities exchange traded funds continue to benefit from the unceasing flood of retail investors into the market.

This has helped to push assets under management for 16 out of the 38 fund houses in Taiwan past the NT$100bn milestone as of the end of June, according to the latest data from the Securities Investment Trust and Consulting Association.

UOB Asset Management recorded the largest growth in the first half, with assets doubling from NT$22.04bn by end-2023 to NT$44.27bn by the end of June.

The Singaporean fund house was the first foreign player in Taiwan’s local ETF market in 2022. The UOB Taiwan High Dividend Recovery ETF, which is also its only ETF in the market, had NT$33.89bn in assets by the end of June, accounting for 77 per cent of UOB AM’s total onshore assets.

This article was previously published by Ignites Asia, a title owned by the FT Group.

The fundraising craze for high-dividend ETFs earlier this year has also led to a significant growth in assets for Uni-President Asset Management and Yuanta Funds.

Uni-President AM launched its first local equities ETF, the Taiwan High Dividend Momentum ETF, in March, breaking the market’s ETF fundraising record with initial assets of NT$53.1bn.

Uni-President AM’s total assets under management have surged by more than 67 per cent to NT$246bn from NT$147bn at the end of last year.

Taiwan’s largest local ETF issuer Yuanta Funds’ Taiwan Value High Dividend ETF raised NT$175.2bn in just five days in March, smashing the previous initial ETF fundraising record in the market by more than fivefold.

Yuanta Funds’ total AUM grew 34.9 per cent in the six months to the end of June from NT$1.44tn to NT$1.94tn, while the total assets of its local equities ETFs grew 60 per cent to NT$1tn.

The surge in retail interest in high-dividend ETFs has prompted regulators to warn of a “herding effect”, with investors “flocking like sheep” to the high-dividend ETFs.

Although the craze has cooled after more recent launches have failed to generate the same level of investors, ETFs have continued to boost the total assets of local issuers.

Capital Investment Trust recorded a 48 per cent jump in total assets from NT$672bn at the end of 2023 to NT$996tn at the end of June.

Fuh Hwa Securities Investment Trust also saw a growth of 38 per cent in total assets from NT$456bn to NT$629bn in the first six months of this year.

The Financial Supervisory Commission has also announced that the first active ETFs could be listed by end of this year, with 15 local and global asset managers already expressing interest in listing the products.

 *Ignites Asia is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at ignitesasia.com.