EWT ETF

iShares MSCI Taiwan ETF has outperformed its peers with an 18.2% return in 2024, driven by strong performance from TSMC. Taiwan's macroeconomic environment remains robust, with GDP growth expected to surpass IMF forecasts, bolstered by domestic spending and a recovering manufacturing sector. With a 23% stake, the prospects of TSM weigh heavily on EWT's prospects; fortunately, the outlook looks bright.

A surge in exports and a slowdown of imports led to a record high trade surplus of USD$11.5bn last month. The stronger-than-anticipated trade surplus should offer some support to Taiwan's third-quarter GDP.

EWT has given back some of its year-to-date gain due to US tech selloff spreading to foreign areas, including Taiwan. The Taiwan fund has a high concentration in Taiwan Semiconductor, making it vulnerable to weakness in chip stocks. EWT's valuation is compelling with an impressive EPS growth trajectory, but concentration risk and geopolitical issues should be considered.

EWT: There Are Better Options Than This ETF

iShares MSCI Taiwan Capped ETF has delivered a total return of more than 57% since hitting a low point in October 2022. EWT's holdings are focused primarily on the technology sector, which has helped it outperform the S&P 500. With Taiwan's economy in a growth phase, there is room for EWT's price to keep rising. Caution may be advisable for risk-averse investors who may prefer to wait for a dip before considering an investment.

Investors are rushing to invest in Taiwan exchange-traded funds to gain exposure to the artificial intelligence supply chain, which has caused concern among analysts and regulators as the sector's rally becomes unpredictable and volatile.

iShares MSCI Taiwan ETF is worth considering for international diversification and potential outsized returns. The EWT ETF's top holdings include Taiwan Semiconductor Manufacturing Company Limited and MediaTek, Inc., with the former making up over 22% of the fund. EWT offers exposure to Taiwan's economy, but investors should be aware of currency and geopolitical risks.

In bull markets, a higher beta, tech-heavy fund like Nomura's Taiwan Fund tends to add a fair bit of outperformance.

This Saturday, Taiwan will head to the polls, in elections that will be closely watched by investors, due to the self-governing territory's outsized role in the global economy as the biggest semiconductor manufacturer in the world.