Taiwan Stock Exchange Strengthens Cross-Border Collaborations with Japan for Asset Management

Strengthening Ties: Taiwan Stock Exchange and Japan

On December 10, 2025, the Taiwan Stock Exchange (TWSE) is on a mission to solidify its position as the Asian Asset Management Center (AAMC) as set forth by Taiwan's Financial Supervisory Commission. In pursuit of this goal, TWSE Chairman Sherman Lin, alongside representatives from six Taiwanese asset management firms, visited Japan to enhance bilateral collaborations with Japanese asset managers and the Tokyo Stock Exchange.

The partnership between Japan and Taiwan began to take shape in September of this year when they co-listed their first cross-border ETFs on both the TWSE and the Tokyo Stock Exchange (TSE). The performance has been remarkable, with the "NEXT FUNDS – Nomura TOPIX Feeder ETF" (Taiwan listed code: 009812) seeing an impressive 89% increase in assets under management (AUM) since its inception, reflecting the strong interest of Taiwanese investors in the Japanese market. Meanwhile, Japanese investors have also shown a significant appetite for Taiwan's technology stocks. The AUM for the Taiwanese technology-focused ETFs such as the "NEXT FUNDS TIP FactSet Taiwan Innovative Technology 50 Index ETF" (TSE code: 412A) and "iFreeETF Cathay Taiwan Tech Leaders ETF" (TSE code: 413A) skyrocketed by 410% and 522%, respectively, indicating a mutual investment interest between both markets.

During the visit, the TWSE facilitated discussions to promote dialogue between Taiwanese and Japanese asset management firms. They focused on the characteristics of cross-border ETFs, investor demographics, trending themes, and considerations for asset management and trading. The Taiwanese delegation exchanged views on future cooperation possibilities, laying down a robust foundation for further collaboration.

In a press conference held in Tokyo, Chairman Lin emphasized the strong correlation between Taiwan and Japan's market structures and industrial characteristics. He stated that cross-border collaboration not only expands the product line-ups in both markets but also brings substantial strategic investment value to investors. COO of the AAMC, Brenda Hu, discussed the objectives and expected outcomes of the AAMC initiative, while Liu Tsung-Sheng, Chairman of Yuanta Securities Investment Trust, outlined the developments in Taiwan's ETF market. Experience regarding the establishment of cross-border ETFs was shared by Cathay SITE, illustrating the benefits of leveraging strengths from both markets to offer comprehensive and diverse investment opportunities to investors.

Looking forward, TWSE aims to enhance cross-border collaborations, fostering stronger ties with major international markets. Through product diversification, improved market infrastructure, and ongoing dialogue with overseas institutional investors, TWSE strives to create a more attractive investment climate and aims to firmly establish Taiwan as the Asian Asset Management Center.

Highlights of the Taiwanese ETF Market

1. Taiwan's ETF Market Ranks Third in Asia
By November 2025, the total AUM in Taiwan's ETF market reached $235.6 billion, making it the third largest in Asia, following China and Japan. The product lineup includes domestic and international equity ETFs, bond ETFs, leveraged and inverse ETFs, commodity ETFs, REITs, active ETFs, and multi-asset (equity-bond balance) ETFs.

2. Rapid Market Expansion Fueled by Record Penetration Rates
As of October 2025, the AUM reached $237 billion, with ETFs comprising over 66% of the total AUM of all investment trusts. The number of ETF beneficiaries in Taiwan reached 15.8 million, surpassing the number of stock trading accounts (13.66 million) and reaching a penetration rate of 115.7%. The AUM is expected to grow by over 20% by the end of November 2025 compared to $195.5 billion at the end of 2024.

3. Taiwanese Equity ETFs Drive Market Growth
Over 75% of ETF investors in Taiwan own equity ETFs, with the AUM for Taiwanese equity ETFs reaching $114.4 billion by 2025. Timely growth is evident as the AUM increased by $26.1 billion as of October 2025, accounting for over 50% of the total ETF market AUM.
Individual investor participation remains robust, consistently making up over 50% of the total trading volume in the market.

4. Taiwan ETF 2.0: Policy-led Growth and Ecosystem Establishment
As part of the initiative to build the AAMC, the Financial Supervisory Commission (FSC) has approved active ETFs and multi-asset ETFs slated for launch by the end of 2024. The market is establishing a complete ecosystem where index providers develop benchmarks, asset management companies issue ETFs, and brokerage firms facilitate transactions and provide liquidity. By 2025, five new asset management companies, including Allianz, Prudential, BlackRock, J.P. Morgan, and AllianceBernstein, will enter the market, bringing the total to 23 companies by November 2025.

5. Strong International Partnerships
Taiwan collaborates with major global index providers such as FTSE, Bloomberg, ICE, MSCI, and S&P, reaching a combined AUM of $230 billion as of September 19, 2025. The mutual listings of ETFs in Japan and Taiwan took place in September 2025, underscoring the international ties being forged.

6. Effective Investor Education and Regular Investment Plans (RSP)
A variety of forums and educational campaigns have expanded participation among individual investors. By October 2025, the number of ETF regular investment accounts reached 2.169 million, indicating a deepening commitment to the Taiwanese market.