The next step is approval from Taiwan’s investment management committee or the Securities Investment Trust and Consulting Association, the Financial Supervisory Commission, and the country’s central bank.
Taishin Securities Investment Trust is part of Taiwan’s Taishin Bank.
If fully approved, the products will be the first ETFs that Taishin launched in Taiwan. They would also be the first ETFs to track the specific indices: the MSCI China Index, the MSCI Taiwan Short Daily Index and the MSCI Taiwan Leveraged 2x Daily Index.
The MSCI China Index is composed of 150 stocks of Chinese companies, including China B-shares, H-shares and ADRs, according to TWSE.
The other two indices are based on the MSCI Taiwan Index, with the Leveraged 2x Daily Index reflecting twice the daily return of MSCI Taiwan, while the Short Daily Index reflecting the inversed daily return of the underlying index.
Leveraged and inverse ETFs have become very popular in Taiwan. As of end-March, leverage and inverse ETF assets were around $4.9bn, accounting for 52% of Taiwan’s $9.39bn ETF market, Jeff Chang, chairman of Taiwan’s Securities Investment Trust and Consulting Association (Sitca), said at Fund Forum Asia last month.
ETF growth
The ETF that will be tracking the MSCI China Index will be competing against 18 other domestic ETFs that have offshore underlying components, while the two other funds will be competing against 39 other leveraged and inverse ETFs, according to data from the TWSE.
There are nine ETF managers that have issued 78 ETFs in Taiwan. However, two players – Yuanta Securities Investment Trust and Fubon Asset Management – dominate the industry, managing a combined total of 53 ETFs.
ETF managers in Taiwan
|
Manager |
Domestic ETFs – onshore |
Domestic ETFs – offshore |
Offshore ETFs |
L&I ETFs |
Futures ETFs |
L&I futures ETFs |
TOTAL |
|
Yuanta Securities Investment Trust |
7 |
6 |
– |
8 |
3 |
5 |
29 |
|
Fubon Asset Management |
6 |
5 |
– |
12 |
1 |
– |
24 |
|
Cathay Securities Investment Trust |
– |
3 |
– |
9 |
– |
– |
12 |
|
Fuh Hwa Securities Investment Trust |
– |
2 |
– |
2 |
– |
– |
4 |
|
Capital Investment Trust Corporation |
– |
2 |
– |
2 |
– |
– |
4 |
|
Mega International Investment Trust |
1 |
– |
– |
1 |
– |
– |
2 |
|
Sino Pac Securities Investment Trust |
1 |
– |
– |
– |
– |
– |
1 |
|
BOCI-Prudential Asset Management |
– |
– |
1 |
– |
– |
– |
1 |
|
Paradigm Asset Management |
– |
– |
– |
– |
1 |
– |
1 |
|
TOTAL |
15 |
18 |
1 |
34 |
5 |
5 |
78 |
Source: TWSE
Yuanta is expected to roll out another ETF. In February, it filed an application to launch an ETF that would track the SZSE ChiNext Price Index, which includes the top 100 stocks in terms of market value and liquidity in the ChiNext market of the Shenzhen Stock Exchange.
Taiwan’s ETF industry continues to grow. During the last five years, ETF assets have doubled to NT$285.4bn ($9.45bn) at end April, according to data from Sitca. The ETF industry now accounts for 13% of onshore mutual fund assets in Taiwan, compared to just 6% in 2013.
Taiwan’s first ETF launched in 2003 and it is now the sixth largest ETF market in Asia, according to TWSE.
Taiwan’s onshore mutual fund assets
|
|
ETF assets (NT$ bn) |
Onshore mutual fund assets (NT$ trn) |
ETF market share |
|
April 2017 |
285.4 |
2.22 |
12.83% |
|
April 2016 |
238.57 |
2.13 |
10.43% |
|
April 2015 |
179.11 |
2.13 |
8.41% |
|
April 2014 |
117.77 |
2.07 |
5.68% |
|
April 2013 |
135.22 |
2.03 |
6.66% |
Source: Sitca
