Taiwan’s ETF industry is maturing: Nasdaq Head


By Kuan-lin Liu, The China Post

Nasdaq expressed optimism regarding the growth of exchange traded funds (ETFs) both in Taiwan and the international market during an interview with local media Tuesday.

During a conference educating investors on ETFs Monday, the Financial Supervisory Commission announced that it would allow investors in Taiwan to invest globally in all of the asset classes.

Speaking with reporters on Tuesday, Nasdaq’s Head Robert J. Hughes of the Global Index Group applauded this move, saying that it would remove constraints on investors and instead allow them to “build their own asset allocation model utilizing ETFs.” The financial technology, trading and information services provider currently has 307 exchange traded products (ETPs) in 20 different countries, according to Hughes’ report.

According to Hughes, the Nasdaq-100 is “the company’s most successful index,” and it is this ETF that the company launched in Taiwan last year with local asset manager partner and Nasdaq-100 licensee Fubon.

As of the end of March, local media reports found that Taiwan’s ETF markets currently have 76 listings that include 8 overseas markets.

Hughes assessed the current state of the ETF market in the country, saying that the Taiwanese ETF market had “continued to mature and will start to look similar to the ETF industry in the U.S., where you have the ability to actively allocate across the entire spectrum of asset classes to create your own ETF strategies.”

With the latest deregulation from the FSC, investors in the Taiwanese ETF market can fully harness the potential of ETFs, to “utilize ETFs as building blocks … for a portfolio.” A Growing ETF Market The adoption of ETF is taking place at an increasing rate, according to Hughes, which means that money is rapidly going into ETFs at an increasing rate.

The ETF industry grows at around 20 percent per year, essentially doubling every five years, Hughes continued. According to a PwC report Hughes cited, the ETF industry could exceed US$7 trillion by 2021.

As a beneficiary of the rapid growth in ETF, Hughes reiterated Nasdaq’s support for the growth in “any way that we can,” which for starters has meant making the Nasdaq-100 more accessible.