October 1, 2024 • 22 mins
Taiwan's equity returns may continue to take their cue from TSMC, which accounts for 36% of the market’s index weighting. Exchange-traded funds may keep winning favor with retail and institutional investors, boosted by AI applications, and as actively managed ETFs march onto its investment landscape, perhaps by late 2024. Dr. Julian Tsung-Sheng Liu, chairman of Yuanta Securities Investment Trust Co. Ltd. discusses Taiwan’s investment outlook and growth prospects with co-hosts David Ingles and Rebecca Sin on this episode of Tiger Money.
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Speaker 1 (00:00):
This podcast is brought to you by HKX, Asia's ETF marketplace. Well,
you'll find a gateway to liquidity and a diverse selection
of opportunities across asset classes, sectors and themes in Asia
and beyond. Search HKX to learn more.
Speaker 2 (00:17):
Good morning, good afternoon, good evening, and good night's wherever
in this vast, beautiful planet you're joining us from. Welcome
to Tiger Money, a podcast about all things investing with
a twist on exchange traded funds in the Asia Pacific
and beyond. I'm David Ingless, non award winning journalist, Bloomberg
TV's Chief Markets editor for the Asia Pacific. I'm also
(00:38):
the host of The China Show, and my co anchor
here is.
Speaker 3 (00:42):
I'm Rebeccason, head of Asia Pacific ETF research at Bloomberg Intelligence.
Taiwan is one of the fastest growing markets for ETFs,
with one hundred and eighty four billion US dollars in
assets under management. They launched the largest ever at ETF
globally this year with more than three point five billion
US assets under management. So with that, let's bring in
(01:03):
Julian View, chairman of Juanta Securities Investment Trust the largest
and first etf issuer in Taiwan. He's the perfect person
to tell us what's happening in the market and why
investors are looking at Taiwan. Welcome Julian, and thank you
for joining Tiger Money. Hi.
Speaker 4 (01:20):
Hello everyone, this is a Julian.
Speaker 2 (01:22):
Julian, you guys are a big deal. We know you're
a big deal. There might be some listeners out there though,
who might not be too familiar with what you guys do.
Maybe we could start off if you could just give
us a simple introduction of what Juanta does. Can you
tell us about the overall business and yeah, what you
guys do and who are you so?
Speaker 4 (01:44):
Yuinta is the first mover in the ETA business in Taiwan.
To date, we have been paving the ETA development here
in full more than twenty one years. We are the
first and also the largest. But however the Taiwan's ETA
market you know, on the undas perspective, we started from
the passive. In the recent year, we also try to
(02:06):
rebalance in between passive and active and also we started
the eating business. In terms of the a un growth
from the fixing cop back to twenty seventeen, so to date,
Taiwan is the largest bung ETF in terms of the
aun in Asia. We have been experiencing very tremendous an
growth in the last two years after the US FED
(02:28):
funds hike, so we see we'll have a very big
exposure and the phenomenons a n growth for the US
treasury market.
Speaker 2 (02:38):
Julian, I want to get your thoughts on the Taiwan
equity market specifically, do you think the bull market can
continue in Taiwan.
Speaker 4 (02:49):
We actually very culturally optimistic because we are almost the
history high, which means we still have a very certain
percentage regarding the downside risk, especially after the August market corrections.
People actually have more custures and the more actually this
kind of the risk advertised towards the potential market adjustment.
(03:13):
So I think the nine still young. But however, the investor,
especially for Taiwan's mom and power investor, they have a
very good investment behalf we ca bi black sale red
by low sale high, so they are quite reluctant to
trace the market high, but they are morely happy to
(03:33):
accumulate the share during the weakness. So yes, we are
very bullished towards the industry outlook. Regarding the AI and
the semiconductor. But however, if this is an opportunity means
this is a terms of the challenge at hand. So
we'll still have this kind of the strategy to educate
investor to balance in between the equity and the fixed income,
(03:55):
to balance the local international, to balance from the single
investment versus regular saving plan. So we are trying to
share in. Then a lot of the AI application regarding
the robody advisory is heavily applied by using the ETF.
So we see a lot of the investors quite joining
(04:16):
this kind of AI booming and also writing on the
potential upside of the tile equitement market.
Speaker 3 (04:23):
An interesting fact about Julian is that he's a very
good singer, not just in Chinese but in English, and
he knows what the latest hits are. He's also considered
the godfather off in Taiwan, as he launched the first
ETF in two thousand and three. So Julian, can you
tell us about the Taiwan's ETF market, Why has it
(04:43):
grown so much and why is it third in Asia
Pacific after Japan and mainland China.
Speaker 4 (04:49):
It's about the chicken and the egg. So this is
a no free launch, so it's been a while. We
continuously to educate and the interact with the juneral pop Puenta. Basically,
we have been publishing the ETA books more than seventy
seven zero in the last twenty one years. For many years,
we'll conduct more than one thousand seminar around the island.
(05:13):
So it's pretty much like the fruit prints and the
presence for Taiwan. We're trying to have a discand of
the touch base with every individual regarding the ETM investment.
In the last twenty one years, we have been like
one times one one equity one beta to four times four.
We have a four different asset clauses regarding the equity,
(05:35):
fixed income, currency and commodity, so we have a one beta,
two beta, negative one beta and the small beta. Taiwan
has a very holistic and comprehensive product spectrum, and we
also see a lot of participants from like a two
or three ETA player. To date, we have a seventeen
fifteen local, two from International, one from Singapore, another one
(05:58):
from Japan mentioned once we have actively managed ETF. In
the second half or the first half of next year,
we see a lot of Europe and the US big
giant is coming to join the actively ETF battlefield, so
you may see the participation will morning like a twenty
all of the thirty eight local domasile mutual fund company,
(06:21):
so you will see a lot of this kind of
the new player a new blog to join the Taiwan
etr market. I think Taiwan have a very good beneficial
participations and the very good regulatory framework. And also we
see more of the more international ETF player.
Speaker 3 (06:40):
So you mentioned active ETFs and how that's going to
come as early as potentially next year or maybe end
of this year. Active ETFs have seen tremendous growth around
the globe. We've seen more than one trillion dollars in
active ETFs. Who do you think are some of the
new players and what can we expect from Taiwan's active
ETF market.
Speaker 4 (06:58):
As I just mentioned earlier, now the market is heavily
dominated by two essay classes. One is a Taiwan local equity,
another is a US treasury, but those two products quite mature,
so they are trying to enter the ETF market from
the two point zero the generation too, so they see
the actively managed ETF in the worldwide from the US,
(07:22):
South Korea, Hong Kong, etc. They have been a different
style in terms of the conversions, in terms of the
money market funds, in terms of the CD, in terms
of the bond. I think this is for those international
giants they may not just treat Taiwan as the redistribution
channel basis. They will recruit more and more talent and
(07:45):
the techniques and the money to not just drink the
milk here in Taiwan. They are readied to raise a
cow actively et as a cow and ultimately probably maintain
the form. So we are more happy to see more
in the more is kind of participation in from the worldwide.
But also people may ignore they basically have another product
(08:06):
we call multi assets. ETF is also open this time,
but people quite focus on the actively managed ETF because
it's a non index tracking at this moment, but it's
a food transparent. So you see Europe and US probably
in the second half they are ready in terms of
the infrastructure and the ecosystem and launch their IPO probably
(08:29):
the first quarter as soon as possible. Bloomberg magazine last
week have an article to talking about the AI booming
to talking about a lot of the international player including
JP Morgan, allions and the MURA they are ready to
come into Taiwan for actively managed ETF. But now multi
asset is pretty much like multi vitamin, so you don't
(08:51):
need to take like a vitamin A vitamin B separately,
you just take one. So multi asset can combine the
equity and the income into one underlying index.
Speaker 2 (09:02):
And the ETF is the investor based in Taiwan ready
for multi accest strategies and also separately active strategies.
Speaker 4 (09:11):
Yeah, this is a very good question because as I
just mentioned earlier, chicken and the egg, So we are
just thinking about the products. And then if you have
a product, you have to look for the clients. But
if you have a client on hand, and then you
just you know, launch the product to fulfill their needs.
So I think this is another agenda for Taiwan's new
(09:31):
ETA player or existing ETIA player. Where are those appropriates
a suitable actively or a multis et a buyer. So
I think they're going to be another learning cuff. We
have to educate and to protect those potential participants to
know more about this kind of product.
Speaker 1 (09:52):
This podcast is brought to you by HK ex Asia's
ETF marketplace. Well you can get exposure to themes from
ai to virtual assets, small cap to large cap Greater
China to global search HKX to learn more.
Speaker 2 (10:10):
The market is a very large market in Taiwan. I
think not a lot of people realize how deep and
how large asset managers are actually sitting on in Taiwan.
To your point earlier on, so I'm wondering with new
products and strategies coming in, whether that's multi asset or
purely equity active strategies for example, and you mentioned earlier
on there are some very mature products in the market,
(10:33):
equity and fixed income. Where will the additional money come from?
In other words, do you see money flowing out of
mature products or do you see is there a lot
of dry powders sitting somewhere else inside or outside Taiwan
that you think will go into a lot of these
new products coming in.
Speaker 4 (10:49):
A yeah, This is also another very good question because
we are not encouraged to do the zeo sung game,
you know, because the zeosung game in the traditional mutual
business is very easily to be witneys. During the ipo zeason,
you do ipo, you got money, and the other do
ipo you lose money. So it's basically pretty much like
(11:10):
a Zeosung game. But for Taimewan etr market we see
this is a lot of cross industry and the synergy
in between the mutual fund security banking in terms of
wealth management and the live insurance industry. So for example,
in the recent year more and the more investment link
insurance policy, they are more happy to use the ETF
(11:33):
as a component to construct their portfolio. And this is
very low cost and also can feedback very decent coupon
or the dividend in this case. And we see also
a lot of wealth management for those we could safer
or the depositor. They are also recognized the how efficiency
(11:54):
and how attractive for the ETF. So we didn't see
a lot of Zeosung gain adherents among in the very
traditional mutual fund industry, we see a lot of this
kind of harmonized consolidation in between domestic international or the
active and the passive. We see a lot of the
traditional active manager they become the c funds or become
(12:16):
a very big participant towards our ETF. So it's not
zeus on game. It's pretty much like a co competition.
So Taiwan, we see a lot of deposits life insurance holder.
They also cross the industry to join the ETF market.
Speaker 3 (12:33):
So if we talk about the different types of investors
you have in Taiwan, you have a very high retail
adoption with close to eight million users who are familiar
with ETFs. You mentioned institutional clients, you mentioned pension funds
that are allocating to ETFs. In terms of flows, we've
seen forty two billion US dollars in assets under management
(12:53):
go into Taiwan ETFs. But what some people may not
realize is that within the Taiwan Stock Exchange Weighted Index
TSMC accounts for thirty six percent of the index. The
next holding is then onn HI at three point five percent.
And so are you worried about concentration risk? Especially in Taiwan.
There's a lot of high diffidend products that have gathered
(13:15):
a lot of assets, including yours, which was the largest
ETF launch globally. He has launched a high dividend ETF
in Taiwan. A lot of these high dividend products have
very good deal paying ten to fifteen percent on a
monthly basis. And so in terms of flows, what are
investors allocating to Are you worried about concentration risk and
what should investors know?
Speaker 4 (13:38):
TSMC basically is a heavy problem, so we special thanks
to the TSMC's contribution to Taiwan's economy and the financial market.
But as you're concerned and the mentioned regarding the concentrations,
TSMC is pretty much like the other country for example,
like a sim zone towards the cost B or the
other Nvidia of the top three top five towards the
(13:59):
US market. So yes, we are trying to diversify search
concentration ratio through the different product style. For example Taiwan,
if you're using the cap weighted ETF like our Taiwan
top fifty is a forty percent went to the TSMC,
So it's very highly correlated. So once the TMC went up,
(14:20):
the ETA went up, but not to mention once the TSMC,
you know, TOMPO, the ETF also have a very significant
downs at risk. But this is why the nature of
the cap weighted so you have to highly correlatet it
with the market performance. But however, as you just mentioned,
TSMC is not so called high dividend stock. TSMC paid
(14:41):
up dividend quarterly very juicy, but the since the share
prices is very high, so the dividend year is quite
long lately, the popular high dividend etr products basically they
are all known TSMC holdings in this case, so it's
so become another diversifyed occasion. If you buy core holding
(15:02):
went to the cab waiting, set Lights went to the
high dividend, or in the verse co holding, you go
to buy the high dividend for those Patroon find investors,
but the set Lights you can go to the cap
weighting like a very focused on the TSMC. So in
this case, Taiwanese invested they know how to diversify through
search of profolio construction regarding the corn the setlights. So
(15:26):
this is a happy problem, but at least we happy.
Speaker 2 (15:29):
Right TSMC is a happy problem to have while the
stock is doing well. And I'm wondering if in fact,
at some point TSMC, you know, we start to see
the market stake profits as well. Do you think there
are enough solutions to your point, enough solutions in the
market to be able to offset you know, what could
potentially be a deep bear market in Taiwan because the
(15:51):
TSMC stock is not doing well definitely.
Speaker 4 (15:55):
You know during August, this is a you know the
history for this kind of kid jopped that there's three
times it's already took place in August and the September
for Taiwan equity market. Early of August, we see this
as due to the Japan decay in terms of the
curry trade. But you see during the market tumpling, we
(16:16):
have infirs ETF to hage the downside risk nice. So
during the market hot, people forget about the TSMC, people
will forget about the capt weighty ETF. So a lot
of Taiwanese investors including institutional investor or the corporate investor
or the foreign financial investor, they're coming to buy the
(16:37):
infras ETF. For the recently the market temple our infans
CTF in terms of the trading turnover and the trading
volume also hit another history height. It's very remarkable and
the significant so people may not just buying a hod
or buying a whole and received dividends. People know how
to you know, changes in twin trading oriented and allocation orientated.
(17:04):
So people before are tracing the ETF and they become
buying whole and receive diviidend. But after the August market
TOMORROIW people get used to using the schedule INFRASTF during
the market correction. And also this is another two times
leverage ETF for Taiwan top fifty. Also we see a
(17:25):
lot of the creation during the primary market from the
international counterparty because during the market correct and for those
empty hands, they are baiting the rebound opportunity, so they
are not going to buy the one beta, They're going
to buy two beta. So we have a very holistic
I just mentioned four times four people. You really love TSMC,
(17:49):
you want to get the married and then you buy
an hole in the TSMC. When a're down, you just
stick with TSMC. But a lot of investors they know
how to adjust their perform through the two beta one
beta and the NTI one beta, not just the setlight
just mentioned the core and the set line strategy. They
know how to use the vertico not just COMINENTO in
(18:12):
between the different essay classes. They know how to adjust
this strategy in between the different beta from the two
beta small beta and the one beta Nicotie one beta.
Speaker 2 (18:23):
Yeah, so there was a blessing that came out of
the market turmoil. I remember that August five, that Monday. Well,
you learn something new every day to our listeners. If
you're listening to Tiger Money, of course, if you like
what you hear, don't forget to subscribe to like and
to share, Julian, we'll not move from some of the
stereos stuff to some of the lighter things as well.
We mentioned you're a good singer. Let's put it that
(18:43):
way first, before I ask you what your favorite song is,
do you admit that you're a good singer or do.
Speaker 3 (18:49):
You want to sing for us?
Speaker 5 (18:51):
No way, no way, time if you come into one.
I were trying to interact with you through the certain
relieve over alcohol and then we will have a memory
enhancement program and after AP and IPN so during the.
Speaker 2 (19:13):
Day memory enhancement program.
Speaker 4 (19:14):
I'm the very serious man, So I don't talking about
this kind of the KdV psalms. Yeah, I may show
you how good I am to singing the psalms.
Speaker 2 (19:27):
Okay, Well, this is just as an aside. I actually
learned some of my Mandarin because of A and I'm
gonna give away my age if I say this. It
was one specific Taiwanese TV series back in the early
two thousands. It basically involved four guys and a girl
(19:47):
and it had something to do with yeah Lioshayan and
a lot of the songs there. That's how I learned
my Mandarin Chin feyde juebun no shuccini right and all
those things. So I think those are some of the
potential songs we can we can hit uh if Rebecca
and I can't come visit you as well. Rebecca, I
think you've another question to you.
Speaker 3 (20:09):
So you are the ETF advisor to the burst of Malaysia,
k Tim Thailand, k I be Malaysia. You're an avid traveler.
What's your favorite city outside Taiwan and why?
Speaker 4 (20:20):
This is very tough questions. I love old cities. Yeah,
I love all my friends, so yeah, they have a
different specialties for those cities k L Bangkok, Hong Kong,
Singapore's soul or Tokyo. Yeah, every time I craa enjoy
to have a such unique party with our business partner,
(20:43):
old friends.
Speaker 3 (20:45):
Okay, as the godfather of ETFs, what's your favorite ETF?
That's not you and Da.
Speaker 4 (20:52):
No, none, only even you question you guys, Christian is
very tricky. Which ct I love the most? Yeah? If
I say Bangkok, So next time I went to KL,
my ka ol friend will say, hey, Julian, you have
a panel. You had to dream more whiskey because you
don't love KL. So yeah, which product I like? No?
(21:15):
I just only love Okay.
Speaker 2 (21:19):
I like how the answers are properly headed, almost like
your product offering in any market condition, any market direction,
there is a product. And if you want to up
your leverage, you can go one or two or three
beta for that option. There are options for every other
scenario that seems to be the flavor of how Julian
is answering Rebecca's tricky questions.
Speaker 3 (21:39):
Rebecca, come on well, Julian, thank you so much for
your time today. We appreciate having you on Tiger Money
and we look forward to continuing this conversation next time.
Thank you so much. Julian Leo, chairman of Yuanta Securities
Investment Trust.
Speaker 2 (21:54):
Thank you and thank you for listening to Tiger Money
or Boomberg podcast about investing fund and financial markets in
Asia and beyond. If you like what you hear, do
not forget to subscribe to like to share, and so
also leave us a review. We'd love to hear from
you until next time. You can find us inside the
Bloomberg terminal or on LinkedIn. This podcast was produced by
(22:16):
Clara Chan
This podcast is brought to you by HKX, Asia's ETF marketplace. Well,
you'll find a gateway to liquidity and a diverse selection
of opportunities across asset classes, sectors and themes in Asia
and beyond. Search HKX to learn more.
Speaker 2 (00:17):
Good morning, good afternoon, good evening, and good night's wherever
in this vast, beautiful planet you're joining us from. Welcome
to Tiger Money, a podcast about all things investing with
a twist on exchange traded funds in the Asia Pacific
and beyond. I'm David Ingless, non award winning journalist, Bloomberg
TV's Chief Markets editor for the Asia Pacific. I'm also
(00:38):
the host of The China Show, and my co anchor
here is.
Speaker 3 (00:42):
I'm Rebeccason, head of Asia Pacific ETF research at Bloomberg Intelligence.
Taiwan is one of the fastest growing markets for ETFs,
with one hundred and eighty four billion US dollars in
assets under management. They launched the largest ever at ETF
globally this year with more than three point five billion
US assets under management. So with that, let's bring in
(01:03):
Julian View, chairman of Juanta Securities Investment Trust the largest
and first etf issuer in Taiwan. He's the perfect person
to tell us what's happening in the market and why
investors are looking at Taiwan. Welcome Julian, and thank you
for joining Tiger Money. Hi.
Speaker 4 (01:20):
Hello everyone, this is a Julian.
Speaker 2 (01:22):
Julian, you guys are a big deal. We know you're
a big deal. There might be some listeners out there though,
who might not be too familiar with what you guys do.
Maybe we could start off if you could just give
us a simple introduction of what Juanta does. Can you
tell us about the overall business and yeah, what you
guys do and who are you so?
Speaker 4 (01:44):
Yuinta is the first mover in the ETA business in Taiwan.
To date, we have been paving the ETA development here
in full more than twenty one years. We are the
first and also the largest. But however the Taiwan's ETA
market you know, on the undas perspective, we started from
the passive. In the recent year, we also try to
(02:06):
rebalance in between passive and active and also we started
the eating business. In terms of the a un growth
from the fixing cop back to twenty seventeen, so to date,
Taiwan is the largest bung ETF in terms of the
aun in Asia. We have been experiencing very tremendous an
growth in the last two years after the US FED
(02:28):
funds hike, so we see we'll have a very big
exposure and the phenomenons a n growth for the US
treasury market.
Speaker 2 (02:38):
Julian, I want to get your thoughts on the Taiwan
equity market specifically, do you think the bull market can
continue in Taiwan.
Speaker 4 (02:49):
We actually very culturally optimistic because we are almost the
history high, which means we still have a very certain
percentage regarding the downside risk, especially after the August market corrections.
People actually have more custures and the more actually this
kind of the risk advertised towards the potential market adjustment.
(03:13):
So I think the nine still young. But however, the investor,
especially for Taiwan's mom and power investor, they have a
very good investment behalf we ca bi black sale red
by low sale high, so they are quite reluctant to
trace the market high, but they are morely happy to
(03:33):
accumulate the share during the weakness. So yes, we are
very bullished towards the industry outlook. Regarding the AI and
the semiconductor. But however, if this is an opportunity means
this is a terms of the challenge at hand. So
we'll still have this kind of the strategy to educate
investor to balance in between the equity and the fixed income,
(03:55):
to balance the local international, to balance from the single
investment versus regular saving plan. So we are trying to
share in. Then a lot of the AI application regarding
the robody advisory is heavily applied by using the ETF.
So we see a lot of the investors quite joining
(04:16):
this kind of AI booming and also writing on the
potential upside of the tile equitement market.
Speaker 3 (04:23):
An interesting fact about Julian is that he's a very
good singer, not just in Chinese but in English, and
he knows what the latest hits are. He's also considered
the godfather off in Taiwan, as he launched the first
ETF in two thousand and three. So Julian, can you
tell us about the Taiwan's ETF market, Why has it
(04:43):
grown so much and why is it third in Asia
Pacific after Japan and mainland China.
Speaker 4 (04:49):
It's about the chicken and the egg. So this is
a no free launch, so it's been a while. We
continuously to educate and the interact with the juneral pop Puenta. Basically,
we have been publishing the ETA books more than seventy
seven zero in the last twenty one years. For many years,
we'll conduct more than one thousand seminar around the island.
(05:13):
So it's pretty much like the fruit prints and the
presence for Taiwan. We're trying to have a discand of
the touch base with every individual regarding the ETM investment.
In the last twenty one years, we have been like
one times one one equity one beta to four times four.
We have a four different asset clauses regarding the equity,
(05:35):
fixed income, currency and commodity, so we have a one beta,
two beta, negative one beta and the small beta. Taiwan
has a very holistic and comprehensive product spectrum, and we
also see a lot of participants from like a two
or three ETA player. To date, we have a seventeen
fifteen local, two from International, one from Singapore, another one
(05:58):
from Japan mentioned once we have actively managed ETF. In
the second half or the first half of next year,
we see a lot of Europe and the US big
giant is coming to join the actively ETF battlefield, so
you may see the participation will morning like a twenty
all of the thirty eight local domasile mutual fund company,
(06:21):
so you will see a lot of this kind of
the new player a new blog to join the Taiwan
etr market. I think Taiwan have a very good beneficial
participations and the very good regulatory framework. And also we
see more of the more international ETF player.
Speaker 3 (06:40):
So you mentioned active ETFs and how that's going to
come as early as potentially next year or maybe end
of this year. Active ETFs have seen tremendous growth around
the globe. We've seen more than one trillion dollars in
active ETFs. Who do you think are some of the
new players and what can we expect from Taiwan's active
ETF market.
Speaker 4 (06:58):
As I just mentioned earlier, now the market is heavily
dominated by two essay classes. One is a Taiwan local equity,
another is a US treasury, but those two products quite mature,
so they are trying to enter the ETF market from
the two point zero the generation too, so they see
the actively managed ETF in the worldwide from the US,
(07:22):
South Korea, Hong Kong, etc. They have been a different
style in terms of the conversions, in terms of the
money market funds, in terms of the CD, in terms
of the bond. I think this is for those international
giants they may not just treat Taiwan as the redistribution
channel basis. They will recruit more and more talent and
(07:45):
the techniques and the money to not just drink the
milk here in Taiwan. They are readied to raise a
cow actively et as a cow and ultimately probably maintain
the form. So we are more happy to see more
in the more is kind of participation in from the worldwide.
But also people may ignore they basically have another product
(08:06):
we call multi assets. ETF is also open this time,
but people quite focus on the actively managed ETF because
it's a non index tracking at this moment, but it's
a food transparent. So you see Europe and US probably
in the second half they are ready in terms of
the infrastructure and the ecosystem and launch their IPO probably
(08:29):
the first quarter as soon as possible. Bloomberg magazine last
week have an article to talking about the AI booming
to talking about a lot of the international player including
JP Morgan, allions and the MURA they are ready to
come into Taiwan for actively managed ETF. But now multi
asset is pretty much like multi vitamin, so you don't
(08:51):
need to take like a vitamin A vitamin B separately,
you just take one. So multi asset can combine the
equity and the income into one underlying index.
Speaker 2 (09:02):
And the ETF is the investor based in Taiwan ready
for multi accest strategies and also separately active strategies.
Speaker 4 (09:11):
Yeah, this is a very good question because as I
just mentioned earlier, chicken and the egg, So we are
just thinking about the products. And then if you have
a product, you have to look for the clients. But
if you have a client on hand, and then you
just you know, launch the product to fulfill their needs.
So I think this is another agenda for Taiwan's new
(09:31):
ETA player or existing ETIA player. Where are those appropriates
a suitable actively or a multis et a buyer. So
I think they're going to be another learning cuff. We
have to educate and to protect those potential participants to
know more about this kind of product.
Speaker 1 (09:52):
This podcast is brought to you by HK ex Asia's
ETF marketplace. Well you can get exposure to themes from
ai to virtual assets, small cap to large cap Greater
China to global search HKX to learn more.
Speaker 2 (10:10):
The market is a very large market in Taiwan. I
think not a lot of people realize how deep and
how large asset managers are actually sitting on in Taiwan.
To your point earlier on, so I'm wondering with new
products and strategies coming in, whether that's multi asset or
purely equity active strategies for example, and you mentioned earlier
on there are some very mature products in the market,
(10:33):
equity and fixed income. Where will the additional money come from?
In other words, do you see money flowing out of
mature products or do you see is there a lot
of dry powders sitting somewhere else inside or outside Taiwan
that you think will go into a lot of these
new products coming in.
Speaker 4 (10:49):
A yeah, This is also another very good question because
we are not encouraged to do the zeo sung game,
you know, because the zeosung game in the traditional mutual
business is very easily to be witneys. During the ipo zeason,
you do ipo, you got money, and the other do
ipo you lose money. So it's basically pretty much like
(11:10):
a Zeosung game. But for Taimewan etr market we see
this is a lot of cross industry and the synergy
in between the mutual fund security banking in terms of
wealth management and the live insurance industry. So for example,
in the recent year more and the more investment link
insurance policy, they are more happy to use the ETF
(11:33):
as a component to construct their portfolio. And this is
very low cost and also can feedback very decent coupon
or the dividend in this case. And we see also
a lot of wealth management for those we could safer
or the depositor. They are also recognized the how efficiency
(11:54):
and how attractive for the ETF. So we didn't see
a lot of Zeosung gain adherents among in the very
traditional mutual fund industry, we see a lot of this
kind of harmonized consolidation in between domestic international or the
active and the passive. We see a lot of the
traditional active manager they become the c funds or become
(12:16):
a very big participant towards our ETF. So it's not
zeus on game. It's pretty much like a co competition.
So Taiwan, we see a lot of deposits life insurance holder.
They also cross the industry to join the ETF market.
Speaker 3 (12:33):
So if we talk about the different types of investors
you have in Taiwan, you have a very high retail
adoption with close to eight million users who are familiar
with ETFs. You mentioned institutional clients, you mentioned pension funds
that are allocating to ETFs. In terms of flows, we've
seen forty two billion US dollars in assets under management
(12:53):
go into Taiwan ETFs. But what some people may not
realize is that within the Taiwan Stock Exchange Weighted Index
TSMC accounts for thirty six percent of the index. The
next holding is then onn HI at three point five percent.
And so are you worried about concentration risk? Especially in Taiwan.
There's a lot of high diffidend products that have gathered
(13:15):
a lot of assets, including yours, which was the largest
ETF launch globally. He has launched a high dividend ETF
in Taiwan. A lot of these high dividend products have
very good deal paying ten to fifteen percent on a
monthly basis. And so in terms of flows, what are
investors allocating to Are you worried about concentration risk and
what should investors know?
Speaker 4 (13:38):
TSMC basically is a heavy problem, so we special thanks
to the TSMC's contribution to Taiwan's economy and the financial market.
But as you're concerned and the mentioned regarding the concentrations,
TSMC is pretty much like the other country for example,
like a sim zone towards the cost B or the
other Nvidia of the top three top five towards the
(13:59):
US market. So yes, we are trying to diversify search
concentration ratio through the different product style. For example Taiwan,
if you're using the cap weighted ETF like our Taiwan
top fifty is a forty percent went to the TSMC,
So it's very highly correlated. So once the TMC went up,
(14:20):
the ETA went up, but not to mention once the TSMC,
you know, TOMPO, the ETF also have a very significant
downs at risk. But this is why the nature of
the cap weighted so you have to highly correlatet it
with the market performance. But however, as you just mentioned,
TSMC is not so called high dividend stock. TSMC paid
(14:41):
up dividend quarterly very juicy, but the since the share
prices is very high, so the dividend year is quite
long lately, the popular high dividend etr products basically they
are all known TSMC holdings in this case, so it's
so become another diversifyed occasion. If you buy core holding
(15:02):
went to the cab waiting, set Lights went to the
high dividend, or in the verse co holding, you go
to buy the high dividend for those Patroon find investors,
but the set Lights you can go to the cap
weighting like a very focused on the TSMC. So in
this case, Taiwanese invested they know how to diversify through
search of profolio construction regarding the corn the setlights. So
(15:26):
this is a happy problem, but at least we happy.
Speaker 2 (15:29):
Right TSMC is a happy problem to have while the
stock is doing well. And I'm wondering if in fact,
at some point TSMC, you know, we start to see
the market stake profits as well. Do you think there
are enough solutions to your point, enough solutions in the
market to be able to offset you know, what could
potentially be a deep bear market in Taiwan because the
(15:51):
TSMC stock is not doing well definitely.
Speaker 4 (15:55):
You know during August, this is a you know the
history for this kind of kid jopped that there's three
times it's already took place in August and the September
for Taiwan equity market. Early of August, we see this
as due to the Japan decay in terms of the
curry trade. But you see during the market tumpling, we
(16:16):
have infirs ETF to hage the downside risk nice. So
during the market hot, people forget about the TSMC, people
will forget about the capt weighty ETF. So a lot
of Taiwanese investors including institutional investor or the corporate investor
or the foreign financial investor, they're coming to buy the
(16:37):
infras ETF. For the recently the market temple our infans
CTF in terms of the trading turnover and the trading
volume also hit another history height. It's very remarkable and
the significant so people may not just buying a hod
or buying a whole and received dividends. People know how
to you know, changes in twin trading oriented and allocation orientated.
(17:04):
So people before are tracing the ETF and they become
buying whole and receive diviidend. But after the August market
TOMORROIW people get used to using the schedule INFRASTF during
the market correction. And also this is another two times
leverage ETF for Taiwan top fifty. Also we see a
(17:25):
lot of the creation during the primary market from the
international counterparty because during the market correct and for those
empty hands, they are baiting the rebound opportunity, so they
are not going to buy the one beta, They're going
to buy two beta. So we have a very holistic
I just mentioned four times four people. You really love TSMC,
(17:49):
you want to get the married and then you buy
an hole in the TSMC. When a're down, you just
stick with TSMC. But a lot of investors they know
how to adjust their perform through the two beta one
beta and the NTI one beta, not just the setlight
just mentioned the core and the set line strategy. They
know how to use the vertico not just COMINENTO in
(18:12):
between the different essay classes. They know how to adjust
this strategy in between the different beta from the two
beta small beta and the one beta Nicotie one beta.
Speaker 2 (18:23):
Yeah, so there was a blessing that came out of
the market turmoil. I remember that August five, that Monday. Well,
you learn something new every day to our listeners. If
you're listening to Tiger Money, of course, if you like
what you hear, don't forget to subscribe to like and
to share, Julian, we'll not move from some of the
stereos stuff to some of the lighter things as well.
We mentioned you're a good singer. Let's put it that
(18:43):
way first, before I ask you what your favorite song is,
do you admit that you're a good singer or do.
Speaker 3 (18:49):
You want to sing for us?
Speaker 5 (18:51):
No way, no way, time if you come into one.
I were trying to interact with you through the certain
relieve over alcohol and then we will have a memory
enhancement program and after AP and IPN so during the.
Speaker 2 (19:13):
Day memory enhancement program.
Speaker 4 (19:14):
I'm the very serious man, So I don't talking about
this kind of the KdV psalms. Yeah, I may show
you how good I am to singing the psalms.
Speaker 2 (19:27):
Okay, Well, this is just as an aside. I actually
learned some of my Mandarin because of A and I'm
gonna give away my age if I say this. It
was one specific Taiwanese TV series back in the early
two thousands. It basically involved four guys and a girl
(19:47):
and it had something to do with yeah Lioshayan and
a lot of the songs there. That's how I learned
my Mandarin Chin feyde juebun no shuccini right and all
those things. So I think those are some of the
potential songs we can we can hit uh if Rebecca
and I can't come visit you as well. Rebecca, I
think you've another question to you.
Speaker 3 (20:09):
So you are the ETF advisor to the burst of Malaysia,
k Tim Thailand, k I be Malaysia. You're an avid traveler.
What's your favorite city outside Taiwan and why?
Speaker 4 (20:20):
This is very tough questions. I love old cities. Yeah,
I love all my friends, so yeah, they have a
different specialties for those cities k L Bangkok, Hong Kong,
Singapore's soul or Tokyo. Yeah, every time I craa enjoy
to have a such unique party with our business partner,
(20:43):
old friends.
Speaker 3 (20:45):
Okay, as the godfather of ETFs, what's your favorite ETF?
That's not you and Da.
Speaker 4 (20:52):
No, none, only even you question you guys, Christian is
very tricky. Which ct I love the most? Yeah? If
I say Bangkok, So next time I went to KL,
my ka ol friend will say, hey, Julian, you have
a panel. You had to dream more whiskey because you
don't love KL. So yeah, which product I like? No?
(21:15):
I just only love Okay.
Speaker 2 (21:19):
I like how the answers are properly headed, almost like
your product offering in any market condition, any market direction,
there is a product. And if you want to up
your leverage, you can go one or two or three
beta for that option. There are options for every other
scenario that seems to be the flavor of how Julian
is answering Rebecca's tricky questions.
Speaker 3 (21:39):
Rebecca, come on well, Julian, thank you so much for
your time today. We appreciate having you on Tiger Money
and we look forward to continuing this conversation next time.
Thank you so much. Julian Leo, chairman of Yuanta Securities
Investment Trust.
Speaker 2 (21:54):
Thank you and thank you for listening to Tiger Money
or Boomberg podcast about investing fund and financial markets in
Asia and beyond. If you like what you hear, do
not forget to subscribe to like to share, and so
also leave us a review. We'd love to hear from
you until next time. You can find us inside the
Bloomberg terminal or on LinkedIn. This podcast was produced by
(22:16):
Clara Chan
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