Investment markets to keep your eyes on. Taiwan.
This article will assist you to understand why you should consider putting Taiwan stocks into your portfolio.
Investment29 Jul 2024
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It will outline the route to profiting from high growth country. And highlight sectors in Taiwan which will all add to your portfolio diversification.

Taiwan

To start with, let’s look at the modern bustling Taiwan. The place where innovation meets opportunity. Taiwan presents promising growth opportunities and attractive investment potential, driven by its robust technological prowess, engineering expertise, and strong partnerships with the US, Japan, and Europe. In the heart of the bustling tech landscape, Taiwan emerges as a formidable force in the global AI market, leading with an established semiconductor supply chain that places it at the forefront of Tech innovation.

The island thrives on products such as semiconductors and other tech components. Of which, Taiwan already produces around 60%1 of the world’s computer chips, with the latest technology. The interest in Taiwanese equities is being propelled by the success of U.S technology Stocks which has been a catalyst adding on to the overall AI sentiment boosting investors’ appetite for AI value chain.

Additionally, the benchmark TAIEX,Taiwan's main stock exchange, closed up 26.7% for the year 2023 as a whole, and impressively gained NT$12.73 trillion2 (US$416.2 billion) in market capitalisation. And to navigate and capitalise on this impressive growth trajectory, DBS is here to help.

One of the ways to capitalise on the exciting prospects offered by Taiwan's tech-driven economy are ETFs.

What are ETFs and why are they gaining traction among savvy investors?

Exchange-Traded Funds (ETFs) are investment funds that trade on stock exchanges - it’s like a basket of different investments, such as stocks, bonds, or commodities, all bundled together in a single fund. ETFs are a flexible, reliable and cost - effective investment option that provides diversification and liquidity for investors.

There are a couple of recent developments that make investing in Taiwan ETFs an intriguing prospect. Taiwan’s ETF market has experienced huge growth in recent years, with total ETF assets surging more than 64% in 2023 to reach NT$3.85tn ($123.1bn)3. ETF assets accounted for an all-time high of 57% share of the entire Taiwan onshore fund market by end of 2023. The fourth-quarter GDP performance in 2023 surpassed expectations, paving the way for a promising trajectory in 2024. Coupled with the global uptrend in memory chip prices throughout January 2024 signals improved conditions in the semiconductor sector, there's a clear momentum in the Taiwan economy. Taking all these factors into account, exploring Taiwan-focused ETFs could offer a strategic and promising entry point into a booming market.

If you are new to DBS, you can open your account now and connect with an investment advisor for a more detailed walk through of investment opportunities.

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Sources:

  1. 1Taiwan’s export growth suddenly sputters, but AI shipments offer ‘cushion’ amid subdued electronics market dated 8 March, 2024 (https://www.scmp.com/economy/economic-indicators/article/3254705/taiwans-export-growth-suddenly-sputters-ai-shipments-offer-cushionamid-subdued-electronics-market)
  2. 2Taiwan stock market achieves second-largest gain in history in 2023 dated 29 December, 2023 (https://focustaiwan.tw/business/202312290011)
  3. 3Taiwan set to allow active ETFs into booming retail market dated 7 February, 2024 (https://www.ft.com/content/2ee40927-6db7-4add-83c3-b6992a6e294a)
  4. 4Advantages of ETFs. https://www.investopedia.com/articles/exchangetradedfunds/11/advantages-disadvantages-etfs.asp


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