Japan Welcomes Its First Taiwan Equity ETF, Strengthening Tech Market Connections

Japan Welcomes Its First Taiwan Equity ETF

On September 12, 2025, a significant milestone for cross-border investment was achieved when the Taiwan Stock Exchange (TWSE) announced the listing of Japan’s very first exchange-traded fund (ETF) that exclusively invests in Taiwan equities. This groundbreaking development enables investors in Japan to gain direct exposure to Taiwan’s dynamic tech market, which has gained immense recognition for its robust performance in sectors like artificial intelligence and semiconductors.

A Celebratory Ceremony in Tokyo

The listing ceremony, attended by notable figures including TWSE President Edith Lee, marked a memorable occasion at the Tokyo Stock Exchange (TSE). The newly launched ETF is issued by Daiwa Asset Management, tracking the performance of the Cathay SITE's 00881 Taiwan Technology Leaders ETF. This listing is particularly historic as it represents the first instance of an ETF listed in Japan that is directly linked to the Taiwan stock market.

Opening Doors for Japanese Investors

This ETF is set to provide Japanese investors an incredible opportunity to invest in Taiwan’s burgeoning technology sector. As of recent estimates, technology stocks constitute around 72% of Taiwan's total market capitalization, showcasing the dominance and significance of this sector in the country's economy.

President Lee emphasized the substantial growth observed in Taiwan’s equity market, largely driven by skyrocketing global demand for advanced technological solutions. With Taiwan’s benchmark index continually hitting new highs, the influx of investor participation in ETFs has been impressive. Furthermore, the Japanese equity market has displayed resilience, rallying nearly 80% since 2020 and reflecting positive growth trends in both regions.

Growth of Taiwan's ETF Market

The growth trajectory of Taiwan's ETF market has been remarkable; since its inception in 2003, it has become the third largest in the Asia-Pacific region. As of August 2025, there were 294 ETFs listed, with a total combined assets under management (AUM) of NT$6.77 trillion (approximately US$210 billion). This represents a staggering more than 30-fold growth over the past decade, significantly outpacing the global ETF market's growth rate of 5.4 times during the same period.

Investor engagement has also expanded tremendously. Over 15 million individuals in Taiwan now hold ETF positions, correlating to nearly two-thirds of the nation’s population. The trading volume in Taiwan is heavily skewed towards high-dividend and technology-centric ETFs, illustrating a strong appetite from both retail and institutional investors alike.

Strengthening Cross-Border Relationships

During this visit to Japan, the TWSE engaged in important discussions with the Japan Exchange Group, and local asset managers to delve into ETF market development. The listing of the Daiwa ETF is seen as a crucial step towards deeper cooperation between Taiwan and Japan, promising to enhance market integration and visibility for Taiwan’s high-tech industries on international stages.

“This listing is an important first step,” stated Lee. She expressed optimism for future collaborations that will potentially yield more cross-border investment products in the both markets. The TWSE has set clear goals of diversifying their product offerings while simultaneously pursuing international partnerships, keeping in line with Taiwan’s aspirations to establish itself as a key asset management hub in Asia.

About TWSE

The Taiwan Stock Exchange (TWSE) commenced operations on February 9, 1962, and is responsible for the operational and developmental aspects of Taiwan’s securities market. Its core functions include listing, trading, settlement, and surveillance, thereby ensuring a robust, secure, and prosperous trading environment for investors worldwide. The efforts exemplify TWSE’s commitment to safeguarding the market while generating opportunities for investor engagement and growth.