Taiwan has embarked on the active ETF era with its first active ETF listing now a month old. Recent performance statistics show that the actively managed Nomura Taiwan Advantage (00980A) leads the pack with an impressive 8.5% increase. As of June 6, the weighted stock index gained 5.54%, while the average growth for ETFs investing in Taiwanese stocks was 4.9%. Of the 25 ETFs surpassing the market, the top ten performers include: Nomura Taiwan Advantage 8.59%, KGI Taiwan AI 50 8.43%, Prudential Value Momentum 50 8.13%, CITIC Growth High Dividend 8.11%, CITIC Small Cap High Price 7.98%, Yuanta MSCI Financial 7.88%, Taishin Taiwan IC Design 7.75%, FT Taiwan Smart 6.73%, Taishin AI Advantage 6.71%, and Cathay Taiwan Tech Leaders 6.66%.

Launched on April 22 and officially listed on May 5, Nomura Taiwan Advantage is Taiwan’s first active ETF, offering quarterly dividends with a management fee of 0.75% and a custodian fee of 0.035%. As of June 6, its top ten holdings and their respective weightings are: Taiwan Semiconductor Manufacturing Co. 5.42%, MediaTek 5.35%, Foxconn 5.17%, Asus 4.51%, Fubon Financial Holdings 4.06%, Kendi Technology 3.37%, Delta Electronics 3.27%, Quanta Computer 3.24%, Silergy 3.2%, and NXP Semiconductors 2.99%.

Comparing with the initial portfolio, the total number of holdings in Nomura Taiwan Advantage has decreased from 54 to 51, with new additions including Dongyang Industrial, Realtek Semiconductor, Cayman Gourmet, Chroma ATE, Taiwan Tiger Airlines, and Uni-President Enterprises, while companies like Nanchao Investment Holdings and KGI Financial Holdings are no longer included.

According to Yu Jingde, manager of the Nomura Taiwan Smart Active ETF, Taiwanese supply chains play a crucial role in the current AI wave, with the number of Taiwanese partners increasing from 43 to 122 since last year, covering upstream wafer foundry and packaging services to downstream system assembly and component manufacturing. Looking ahead, Yu notes that Taiwanese companies in AI servers (like Quanta and Wistron), cooling modules (like Asetek and Siong Hoo), and high-speed connectors and power modules (like Foxconn and Lite-On) hold both technological leadership and economies of scale, poised to benefit from the accelerating adoption of AI applications and the global expansion of data centers.

Investors might consider allocating some funds to the Nomura Taiwan Advantage as a way to tap into the growth momentum of Taiwanese stocks. Active ETFs can dynamically adjust their holdings according to market conditions, enhancing the long-term competitiveness of their portfolios. Additionally, in times of market volatility, adjustment of holdings can increase defensive strength, providing investors with both ease and transparency in their investment portfolios.