Taiwan's First Stock ETF Listed in Japan Marks Major Milestone

Taiwan's First Stock ETF Listed in Japan

On September 12, 2025, the Taiwan Stock Exchange (TWSE) announced a significant milestone with the launch of Japan's first Exchange-Traded Fund (ETF) that invests solely in Taiwanese stocks on the Tokyo Stock Exchange (TSE). This listing aims to enhance the cross-border connectivity of capital markets and expand opportunities for international investors to access Taiwan's vibrant technology sector.

Launched by Daiwa Asset Management, this ETF is designed to invest in the "Cathay Taiwan Technology Leaders ETF," managed by Cathay Investment Trust. The fund aims to track the Taiwan Technology Leaders Index, making it the first ETF of its kind to debut in Japan and benchmark against the Taiwanese stock market.

The Taiwanese stock market is largely driven by technology-related companies, which account for approximately 72% of its market capitalization. As such, this ETF offers Japanese investors exposure to Taiwan's rapidly growing technology sector, where companies involved in Artificial Intelligence (AI) and semiconductors play a critical role in driving growth.

Peter Li from the TWSE emphasized the increasing global demand for AI and advanced semiconductor technologies, noting that Taiwan's major stock indices have reached record highs, correlating with significant inflows into the ETF market. Additionally, Japan's stock market has experienced robust growth, with an approximate 80% increase since 2020 and over a 10% rise year-to-date, showcasing the strong momentum in both regions' markets.

Growth of Taiwan's ETF Market

Since its inception in 2003, Taiwan's ETF market has steadily expanded to become the third largest in the Asia-Pacific region by August 2025, with 294 ETFs listed and total assets under management (AUM) reaching 6.77 trillion New Taiwan dollars (around USD 210 billion). Over the past decade, Taiwan's ETF market has grown over 30 times and significantly outpaces the global ETF market by 5.4 times.

The participation of individual investors has surged, with over 15 million people, roughly two-thirds of Taiwan's population, now holding ETFs. High-dividend and technology-focused ETFs dominate trading activity, demonstrating both strong demand from retail investors and increasing engagement from institutional investors.

Strengthening Cross-Border Connectivity

During their visit to Japan, TWSE officials held productive talks with the Japan Exchange Group, domestic asset management firms, and industry organizations to exchange views on the development of the ETF market and promote Taiwan's capital market. TWSE regarded the Daiwa Asset Management ETF listing as a key juncture in cross-border ETF collaboration between Taiwan and Japan and expressed hopes for further integration of markets, enhancing the global recognition of Taiwan's technology industry.

Peter Li commented, "This listing is an important first step. We hope to foster the creation of new cross-border products through closer cooperation among exchanges and asset management companies." Moreover, TWSE is committed to diversifying financial products and expanding international partnerships, aligning with its goal of establishing Taiwan as a key asset management hub in Asia.

TWSE Overview

Founded on February 9, 1962, the Taiwan Stock Exchange (TWSE) plays a pivotal role in managing and growing Taiwan's securities market. It offers a wide range of services, including listing, trading, settlement, and market surveillance. These functions are supported by promoting and reviewing listings, post-listing supervision, ensuring market order, and monitoring illegal trading activities. TWSE aims to provide comprehensive services to the securities market, enhancing investor protection and supporting market efficiency.

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