A record rally in Taiwanese stocks is luring retail investors to pile into exchange-traded funds (ETFs), as local regulators stepped up warnings on the herding behavior.
Two new stock ETFs this month raised a combined NT$223.1 billion (US$7.05 billion), with the latest one which ended subscriptions on Friday last week setting a new record.
This brings the total inflows into equity ETFs to about NT$340 billion, more than half of last year’s, underscoring how the global market frenzy around artificial intelligence (AI) is spurring local demand for exposure to a technology-heavy market.
Photo: CNA
Central bank Governor Yang Chin-long (楊金龍) last week described the enthusiasm for ETFs as a “herding effect” in the market.
“Everyone is buying like a swarm of bees,” Yang said at a meeting of the legislature’s Finance Committee on Thursday, answering lawmakers’ questions about the surging popularity in ETFs tracking Taiwanese stocks. “It is becoming something of a bandwagon, just like sheep jumping in one after another,” he said.
He added that such funds helped drive up risk in the stock market, which could lead to greater volatility in the long term. That is set to be a challenging job, as local stocks are powered by a record rally in Taiwan Semiconductor Manufacturing Co (台積電), which supplies the majority of the advanced chips used for AI.
A financial expert warned that the rallies or falls in ETFs’ constituent stocks could affect their movements and investment returns.
“When the ETF goes on the market, if there are fluctuations and corrections, some subscribers may jump ship, as many of them likely do not have any experience in stocks or they are more conservative with their finances. Such a reaction could lead to turbulence that only grows faster and more violent,” financial expert Chen Wei-liang (陳威良) told Formosa TV on Friday.
Yuanta Taiwan Value High Dividend ETF has raised NT$170 billion, breaking a record set by UPAMC Taiwan High Dividend Momentum ETF earlier in the month at NT$53.1 billion, Securities and Futures Bureau Deputy Director Kao Ching-ping (高晶萍) said yesterday.
“The future outlook of the constituent stocks should be taken into account in purchasing any ETFs, and past performance does not equate to future performance,” Financial Supervisory Commission Chairman Thomas Huang (黃天牧) said at a briefing yesterday, adding that ETF issuance would be the focus of regulatory checks.
The commission is considering control measures, including introducing caps on how much can be raised by a single ETF, local media reported earlier.
Real estate agent and property developer JSL Construction & Development Co (愛山林) led the average compensation rankings among companies listed on the Taiwan Stock Exchange (TWSE) last year, while contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) finished 14th. JSL Construction paid its employees total average compensation of NT$4.78 million (US$159,701), down 13.5 percent from a year earlier, but still ahead of the most profitable listed tech giants, including TSMC, TWSE data showed. Last year, the average compensation (which includes salary, overtime, bonuses and allowances) paid by TSMC rose 21.6 percent to reach about NT$3.33 million, lifting its ranking by 10 notches
Popular vape brands such as Geek Bar might get more expensive in the US — if you can find them at all. Shipments of vapes from China to the US ground to a near halt last month from a year ago, official data showed, hit by US President Donald Trump’s tariffs and a crackdown on unauthorized e-cigarettes in the world’s biggest market for smoking alternatives. That includes Geek Bar, a brand of flavored vapes that is not authorized to sell in the US, but which had been widely available due to porous import controls. One retailer, who asked not to be named, because
SEASONAL WEAKNESS: The combined revenue of the top 10 foundries fell 5.4%, but rush orders and China’s subsidies partially offset slowing demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) further solidified its dominance in the global wafer foundry business in the first quarter of this year, remaining far ahead of its closest rival, Samsung Electronics Co, TrendForce Corp (集邦科技) said yesterday. TSMC posted US$25.52 billion in sales in the January-to-March period, down 5 percent from the previous quarter, but its market share rose from 67.1 percent the previous quarter to 67.6 percent, TrendForce said in a report. While smartphone-related wafer shipments declined in the first quarter due to seasonal factors, solid demand for artificial intelligence (AI) and high-performance computing (HPC) devices and urgent TV-related orders
STILL LOADED: Last year’s richest person, Quanta Computer Inc chairman Barry Lam, dropped to second place despite an 8 percent increase in his wealth to US$12.6 billion Staff writer, with CNA Daniel Tsai (蔡明忠) and Richard Tsai (蔡明興), the brothers who run Fubon Group (富邦集團), topped the Forbes list of Taiwan’s 50 richest people this year, released on Wednesday in New York. The magazine said that a stronger New Taiwan dollar pushed the combined wealth of Taiwan’s 50 richest people up 13 percent, from US$174 billion to US$197 billion, with 36 of the people on the list seeing their wealth increase. That came as Taiwan’s economy grew 4.6 percent last year, its fastest pace in three years, driven by the strong performance of the semiconductor industry, the magazine said. The Tsai
RSS