Taiwan’s ETF rally is shifting focus beyond TSMC to tech momentum and ESG strategies

Taiwan’s benchmark has surged this year, and the rally has lifted not only the broader market but also a cluster of locally listed, market-cap-weighted exchange-traded funds that have outperformed even some of the island’s best-known blue-chip names. The strongest performers so far are not the crowd favourites, but Megabank Blue-Chip 30, Yuanta Taiwan Momentum 50 and Capital TIP Taiwan ESG Low Carbon 50, according to Newtalk’s report on May 4. The move comes as the weighted index and TSMC have both posted sharp gains since the start of the year.

The standout among them is Megabank Blue-Chip 30, which has benefited from a portfolio that leans more heavily into other large technology names. Cmoney’s fund data show that TSMC accounts for only about a third of the ETF, while Delta Electronics, MediaTek and several other index heavyweights carry meaningful weightings. That structure has helped the fund keep pace with the broader rally, and, in some periods, beat it. Yuanta Taiwan Momentum 50 has taken a different route to the same result, tilting toward companies with stronger recent momentum as well as size, with Cmoney’s holdings data showing larger allocations to Delta Electronics and MediaTek than many vanilla market-cap funds.

Capital TIP Taiwan ESG Low Carbon 50 has also posted a strong run, helped by its emphasis on lower-carbon, higher-quality large caps. Newtalk said its year-to-date gain has been roughly 43%, and Cmoney’s fund profile shows that it combines ESG screens with heavyweight exposure to the island’s leading listed companies. That has made it more diversified than the most concentrated large-cap trackers, and, in practice, less dependent on TSMC alone.

By contrast, the best-known Taiwan 50-style funds remain heavily anchored to TSMC, which means their short-term fortunes are still closely tied to the chipmaker’s share price. Newtalk noted that this has made month-to-month performance more sensitive to TSMC’s moves, even though those pure index funds have still delivered solid gains this year. Fund data from Cmoney for 0050 and 006208 show the familiar pattern: a dominant TSMC position, smaller stakes in Delta Electronics and MediaTek, and only limited exposure elsewhere.

Looking ahead, Capital’s fund manager Chiou Yu-ju said the AI spillover effect continues to support corporate earnings and the local market. She pointed to upbeat commentary from chip leaders and higher capital spending by US technology firms as evidence that AI application growth remains the key investment theme this year. On her assessment, Taiwan corporate profits could rise by about 20% this year, with room for estimates to improve further if the cycle holds. She added that investors will be watching incoming economic data, Big Tech earnings and capital flows for signs of whether the rally can continue.

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Source: Noah Wire Services