The ETF EWT (iShares) created in 06/2000 USD is listed on the NYSE and replicates the MSCI Taiwan Index 25/50 Index which is composed of the 91 main Taiwanese stocks, composed mostly of technology companies.
The fees of this ETF are 0.62% for AUM of $ 3942M. The replication method is direct (physical) and there is a dividend distribution policy.
Alternative ETFs: TWN (Lyxor in Euro), FLTW (Franklin in USD)
Latest developments
After an increase of 23% in 2017, EWT is slightly up 1.6% in 2018, in the wake of TSM which is almost stable and follows a similar trend to the US semiconductors giants.
The growth of the Taiwanese economy reached 2.86% in 2017 and forecasts for 2018 are currently 2.45% due to a slight slowdown in Chinese growth. GDP grew by 3% in the first quarter as Exports, up more than 6% year-on-year, continued to rise, driven by strong global demand for electronic components and machinery.
Domestic demand has been strong, with household consumption rising more than 3%, particularly in the transport, leisure and culture, and financial services sectors. However, we must remind that the Taiwanese economy is also directly related to Apple, the main customer of the giants TSM and Foxconn, and more generally to the smartphone cycle.
Index & components
EWT is an ETF that offers pure exposure to Taiwan. This is a fairly broad index which is composed of 91 stocks whose specificity is a very strong exposure to the technology sector which represents 55% of the capitalization, followed by financials (18%) and basic materials (10%). %).
The first market capitalization is TSM, one of the largest semiconductor foundries accounting for 21% of the index's capitalization. The top 10 capitalizations - including 4 technology companies - account for 48% of the market capitalization of the index. The Taiwanese index is therefore highly exposed to the global semiconductor industry, which accounts for 40% of the country's exports. Taiwan is a democratic and insular country of 25 million inhabitants, with a GDP of 530mdS which makes it one of the most developed countries of the Asia-Pacific zone.
Taiwanese are overwhelmingly opposed to any plans to reunite with the Beijing regime and are increasingly suspicious of the existence of a relationship of economic dependence. On the other hand, while the break-off of official relations since June 2016, after the election of Ms. Tsai ing-Wen (PDP) who support independence, has not prevented the People's Republic of China from remaining Taiwan's main trading partner, it has been a disadvantage for the service industries in view of the ban on organized tourist trips for mainland Chinese. In this context, and despite the pressure exerted by Beijing to isolate Taipei diplomatically, the president seeks to boost diplomatic relations with countries that still recognize Taiwan as a sovereign country.
It also intends to integrate the island into regional and global trade beyond the free trade agreements concluded in 2013 with Singapore and New Zealand, including discussions to integrate the Trans-Pacific Partnership. Relations between China and Taiwan are quite stormy and Taiwan is not recognized by the UN, if China came to attack militarily Taiwan the UN would not intervene. Taiwan's ties to the US are tight, however, making it a permanent subject of friction with China.
