Key insights
- The post discusses investment strategies in Taiwanese equities, highlighting the high returns of Taiwan index funds like Yuanta Mid-Cap 100 and Taiwan Top 50, driven by the AI and semiconductor boom. It raises concerns about concentration risk (TSMC's dominance) and geopolitical risk related to China. The discussion also explores the choice between investing directly in TSMC, Taiwanese ETFs (EWT), or local TWSE-listed funds. The China factor introduces a significant downside risk to Taiwanese investments
Hi everyone,
I’ve been living in Taiwan for the last 10 years, I have some Taiwanese friends heavily invested into Taiwan index funds, specifically the Yuanta Mid-Cap 100 (0051) and the Taiwan Top 50 (0050). Looking at the last three years (2023-2026), these funds have posted incredible performance, with some metrics showing a total return of nearly 40% annualized.
I know Taiwan has been the "AI engine" of the world lately, but I have a few questions for the seasoned investors here:
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TSMC alone is often 30-50% of the large-cap index. Is it better to just buy TSMC directly, or is there a real diversification benefit to the Mid-Cap 100 (0051)?
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I love Taiwan and plan to make Taiwan my home for the rest of my life. But not going to lie, the whole China thing does makes me a bit hasitant to invest in stocks or real state here. Does the high return justify the potential tail risk?
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For those outside Taiwan, do you prefer the US-listed EWT (iShares MSCI Taiwan ETF) or is it worth the effort to gain direct access to the local TWSE-listed funds?
Would love to hear perspectives from anyone currently overweight in Taiwan