Yuanta Funds's New Taiwan ETF Breaks Record, Sparks Regulatory Concerns

A new Taiwan equities high-dividend exchange traded fund from Yuanta Funds has raised about NT$170bn ($5.4bn) in just five days, setting a new fundraising record. However, the fundraising frenzy has raised concerns from the regulator and the parliament about potential overconcentration. With 48 Taiwan equities ETFs now investing in 402 constituent stocks, the regulator has affirmed that the situation is currently manageable. This news comes amidst worries about the recent surge in ETF popularity and questionable marketing tactics. The market's regulatory body is planning to strengthen measures for fund houses cooperating with key opinion leaders, and to introduce a self-regulatory rule to tackle paid advertising through influencers. Additionally, Taiwan's Central Bank has warned investors about the herding effect in the overheated ETF market, emphasizing the need for measures to cool it down. This latest development sheds light on the explosive growth of ETFs in Taiwan and the corresponding regulatory concerns.