Taiwan ETF

For most investors Taiwan is just another Asian country with a growing economy. For me personally Taiwan is a real Asian pearl. I must confess that I am a little biased about Taiwan as I have had some personal experiences that made me very enthusiastic about this Asian island.

As a child I tried to raise money for the children of Formosa (the old name of Taiwan). My school had chosen Formosa as a sponsor-project as by then the people of Taiwan were starving from hunger. The population suffered from an almost non-existent economy and the Taiwanese people had to rely on gifts from foreign (mostly Western) countries.

Some years ago I was invited by the Taiwanese Chamber of Commerce to visit the country which was a real treat. Today Taiwan is a very modern country that harbors many high-tech companies.

You will not see many tourists as the island is expensive (especially by Asian standards). Education is at a very high level and a large part of the Taiwanese people speak very well English. In my opinion Taiwan is the Silicon Valley of Asia.

It goes without saying that Taiwan relies heavily on exports. Taiwan exports to almost every country in the world. Its relation with China remains a concern but as long as this relationship remains well-balanced this is a real asset. 

iShares MSCI Taiwan UCITS ETF

The MSCI Taiwan index which is tracked by this iShares Taiwan ETF contains about 100 Taiwanese companies. The large number of IT companies stands out with a 55% share in this index and Taiwan ETF.

The financial market sector takes up 20% and the rest is evenly balanced among other sectors. Maybe the most striking feature of this Taiwan ETF is that you will not find very well-known brands among them. The reason for that is simple, most Taiwanese companies excel in manufacturing components and semi-finished products.

With a weighing of 25% Taiwan Semiconductor Manufacturing is by far the largest company in this Taiwan ETF. With 10% Hon Hai Precision Industry will come in second.

As long as Taiwan is capable of producing innovative high-tech products for interesting prices it will keep its economy firmly on a steady growth path. Of course there is a chance that this Taiwan ETF will react negatively due to growing pains in China or Asia.

For me however these hick-ups will represent interesting entry points as I am a true believer of the long term strength of Taiwan. This particular iShares Taiwan ETF is a physical ETF with dividends being paid out half yearly.

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