The Taiwan Monthly

Aug. 2021

Market & ETP Overview

Technology themed ETFs - the new options for investment

In recent years, innovative technologies such as artificial intelligence, big data and Internet of Things have broadened, and investment products with technology themes have gained momentum in drawing investor's awareness. In response to this trend, the Taiwan Stock Exchange (“TWSE”) has newly launched a number of ETFs focusing on technology, including two ETFs targeting the domestic semiconductor industry and the first electric vehicle ETF. The new product success has led to a more vigorous ETF market; by the end of June, the total assets of the 120 ETFs listed on the TWSE has exceeded NT$740 billion, a record high, and the average daily transaction value reached NT$11.3 billion in the first half of the year.


  • New ETFs with semiconductor industry-chain theme

Semiconductors are indispensable for modern technologies. With strong demand for automobiles, smartphones and remote offices, semiconductors continue to be in short supply, and the World Semiconductor Trade Statistics has increased the growth rate of the global semiconductor market in 2021 to about 20%. Taiwan's semiconductor industry has a dominant position in the world; its wafer foundry technologies are leading producers with a market share as high as 60%; IC packaging and testing market share is first globally, and IC design is second in the world.


In order to help investors participate in the growth of Taiwan's semiconductor industry, the TWSE recently welcomed two new ETFs which invest in domestic listed semiconductor companies. The underlying indices of these two ETFs have their respective characteristics. The "Ice FactSet Taiwan ESG Leading Semiconductor Index" not only requires either the return on invested capital or the declared dividends to be positive, but also uses the Sustainalytics ESG score to exclude the companies with higher ESG risks, and finally selects the top 30 companies in terms of market capitalization. On the other hand, in addition to selecting the top three stocks in market capitalization, the “ICE FactSet Taiwan Core Semiconductor Index” mainly uses the GPA (Gross Profit to Assets) ratio as the ranking criteria to determine its constituent stocks.


  • First ETF with the electric vehicle theme

The global electric vehicle market has rapid growth and is another focus of attention as carbon reduction is gradually reaching an international consensus. According to the report of the International Energy Agency, despite the economic recession caused by the pandemic in 2020, global electric car sales rose against the odds, with a record three million new registrations, a 41% increase from 2019. As investors are more confident about the prospects of the electric vehicle market, the related industry has become a popular field of investment.


Following the listing of the first ETN with the electric vehicle theme in December 2020, the TWSE rolled out the first electric vehicle ETF in July this year. This ETF tracks the “ICE FactSet Global Autonomous and Electric Vehicles Index” and invests in the world’s top 30 companies in market capitalization related to the supply chains of autonomous and electric vehicles. The constituent stocks include upstream and downstream enterprises such as lithium battery material suppliers, battery and component producers, as well as brand manufacturers of electric vehicles, covering the three major electric vehicle markets of the United States, Europe and China.


In the past few years, the TWSE has listed many ETFs related to technologies such as robotics and artificial intelligence, FAANG, 5G and network security. Focusing on the competitive advantage of Taiwan's semiconductor industry and the growth trend of the global electric vehicle industry, ETFs with related topics have been listed successfully in recent months, adding new choices for investors. The TWSE will continue developing a wide variety of ETF products, such as those with the themes of innovation and technology, ESG, biotechnology, clean energy and more, in order to meet diversified demand for index investment.


For further information, please contact Ms. Tsai at