TWSE Market Insights

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The global ETF market has been growing rapidly in both assets and the number of products. According to ETFGI data as of August 2025, there were 13,047 ETFs worldwide, with assets under management of approximately US$17.64 trillion. Compared with 2020, when there were 7,410 ETFs worldwide with assets under management of approximately US$7.731 trillion, the number of ETFs increased by 76%, and assets under management increased by 128%.

The rapid growth of the global ETF market can be attributed to a range of factors and is often closely tied to prevailing economic, political, legal, and market conditions, as well as product design, investor profiles, and market sentiment. Accordingly, it is difficult to attribute the expansion of the global ETF market to any single factor. Nevertheless, by reviewing the evolution of ETFs, we can still identify the key issues that are currently at the center of international attention, and the implications these issues may hold for Taiwan’s ETF market. This paper will outline the main themes currently shaping the global ETF landscape, including innovation in active ETFs, the rapid expansion of thematic ETFs, the evolving trajectory of ESG investing, and trends in cash management ETFs, and will further discuss the implications of these developments for Taiwan’s ETF market.

In the global ETF market, active ETFs have attracted substantial attention in recent years, not only because the number of launches and assets under management has grown rapidly, but also because product innovation has had a significant impact on the industry and investors alike. The greatest advantage of active ETFs is that they combine active portfolio management by a manager with the trading convenience and liquidity features of an ETF. Over the past several years of active ETF development, increasing diversity in product design has pushed these advantages to their fullest extent, as reflected in their structures, strategic applications, and underlying exposures.

From a structural perspective, one of the most frequently discussed issues is daily portfolio disclosure. In the early stages of active ETF development, many products adopted a fully transparent structure, meaning that an active ETF was required to disclose its portfolio holdings on a daily basis. This led some asset managers to worry that their trading strategies could be replicated by other firms, and that front running might even occur. In response to this concern, the U.S. Securities and Exchange Commission (SEC) granted approval in 2019 for Precidian Investments’ ActiveShares model, which allows an active ETF to operate without having to disclose its full portfolio holdings on a daily basis, that is, a non-transparent active ETF. In addition, in 2020, the U.S. SEC approved Blue Tractor’s semi transparent structure. Under this structure, the ETF discloses a proxy portfolio after market close, rather than its actual holdings. The proxy portfolio’s risk return characteristics are highly correlated with the fund’s actual portfolio, but not identical, which both enables market makers to conduct effective arbitrage and helps protect the fund’s strategy from being immediately replicated. Multi-asset ETFs also frequently adopt an actively managed structure. Actively managed multi-asset ETFs are overseen by professional portfolio managers who adjust the portfolio in response to market conditions. Management fees are generally higher, but active management allows the manager to make corresponding adjustments when major market changes occur. In terms of the number of funds, based on Bloomberg Terminal data as of August 31, 2025, of the 342 multi-asset ETF[1] worldwide, 228 are actively managed (accounting for 67% of the total), while 114 are passively managed (accounting for 33% of the total). In terms of assets under management, out of US$75,548.66 million in global multi-asset ETF AUM, US$39,586.61 million is in actively managed products (accounting for 52.4% of the total), while US$35,962.05 million is in passively managed products (accounting for 47.6% of the total).

On the other hand, the development of covered call ETFs has also attracted significant attention in terms of strategy implementation. “Covered call ETF” is commonly translated into Chinese as “掩護性買權ETF.” This classic trading strategy typically consists of two components: first, holding the spot asset (that is, holding stocks or ETFs, among others); second, selling call options on the same underlying. The advantage of this strategy is that if the investor believes the underlying asset is unlikely to surge sharply in the near term, they can collect option premiums by selling calls, which become the primary source of return in addition to the underlying itself.  However, when the underlying declines, there is no downside protection, so losses can be substantial, although the option premium income may offset part of the loss. This strategy first saw the launch of the first ETF based on a covered call strategy in the U.S. market at the end of 2007. Subsequently, related products were introduced in Canada in 2010, South Korea in 2012, Ireland in 2020, Japan in 2022, Australia in 2023, and Hong Kong in 2024. New covered call ETF launches have been rapid, and the overall assets under management of covered call ETFs have already exceeded USD 100 billion.[2]

Early covered call ETFs were primarily designed to passively track an index. For example, the Invesco S&P 500 BuyWrite ETF mainly tracks the Cboe S&P 500 BuyWrite Index (USD). More than 90% of the fund’s assets are used to replicate the performance of the underlying, while the fund simultaneously implements a strategy of selling call options on that underlying. In more recent years, the market has also seen actively managed covered call ETFs. One example is the JPMorgan Equity Premium Income ETF (JEPI), launched in 2020, which allocates approximately 80% to large cap equities and 20% to equity linked notes (ELNs), using the ELN sleeve to implement a covered call strategy. Moreover, departing from traditional covered call approaches, some issuers seek to achieve a covered call like payoff by trading 0DTE options. 0DTE (Zero Days To Expiration) refers to option contracts that are traded on the day of expiration and expire the same day. Traditional covered call ETFs typically sell call options with longer maturities (for example, one week, one month, or longer) in exchange for option premiums. Introducing a 0DTE based approach into the covered call ETF space is relatively new and remains controversial. On the one hand, managers can reset the strike price and the option selling strategy based on daily market conditions, potentially generating more consistent premium income by selling calls each day. On the other hand, the need to trade daily can lead to higher transaction costs that may erode returns. In addition, implementing a 0DTE strategy requires highly precise quantitative models and sophisticated techniques to capture price movements over extremely short horizons, which also makes the ETF’s overall operating mechanics more difficult and complex for investors to understand.

A well-known example of the use of a 0DTE strategy is Roundhill’s S&P 500® 0DTE Covered Call Strategy ETF(XDTE) launched in 2024. According to Roundhill’s website, this ETF is the first ETF to utilize a 0DTE strategy on the S&P 500®. This ETF uses a synthetic replication approach to seek the performance of the S&P 500® (achieved by purchasing deep in the money call options[3]). It expects that more than 80% of its assets will be used to replicate the performance of the S&P 500®, and it will sell 0DTE S&P 500 Index call options after the market opens each trading day. The option premiums received are intended to provide a stable source of income, and the ETF distributes the related income to investors on a weekly basis.

 
[1] The figures cited here are based on the definitions used in the Bloomberg Fund Classification system: A fund that invests in a diversified portfolio of instruments across several asset groups, usually dividing allocations predominantly between equities and fixed income.
[2] ProShares’ High Income ETFs Surpass $1 Billion in Assets: As industry-wide assets in covered call ETFs exceed $100 billion….
[3] Reference: Summary Prospectus, p. 2: https://www.roundhillinvestments.com/assets/pdfs/xdte_summary_prospectus.pdf

Interest rate ETFs generally invest in fixed-income securities such as government bonds and corporate bonds, with the aim of earning stable interest income, while also generating capital gains or losses from price fluctuations. Cash management ETFs are a specialized subcategory of interest rate ETFs. They primarily invest in very short-dated, high-quality money market instruments, or use synthetic replication to seek yields higher than traditional bank demand deposits, while maintaining very high liquidity and very low risk.

Cash management ETFs originated early in Europe. For example, the Xtrackers II EUR Overnight Rate Swap UCITS ETF, which tracks the Solactive €STR +8.5 Daily Total Return Index, was listed as early as 2007. As of June 2025, it had assets under management of approximately EUR 17.59 billion, a substantial scale. €STR (Euro short-term rate) is the euro area risk-free overnight rate published by the European Central Bank (ECB). It reflects the cost of unsecured overnight borrowing between euro-area banks and is regarded as the purest short-term risk-free benchmark rate for the euro area. The “+8.5” specified for this ETF means that, on top of the daily €STR, an additional 0.085% per annum is added. This is a fixed, preset interest rate spread. This ETF uses synthetic replication to achieve the index objective. Specifically, it continuously reinvests its daily total return and uses swap contracts to obtain a yield of €STR plus 8.5 basis points.

Beyond Europe, this product type has also grown rapidly in Asia, particularly in South Korea in recent years. South Korea first opened the market to cash management type products (such as those linked to KOFR and SOFR) in 2022, and assets under management expanded quickly thereafter. As of the end of June 2025, according to Bloomberg data, SAMSUNG Kodex CD Rate Active (SYNTH) (459580) (AUM: KRW 8.46 trillion) and SAMSUNG KODEX Money Market Active ETF (488770) (AUM: KRW 6.49 trillion) both ranked among the top five ETFs in South Korea by AUM. The SAMSUNG Kodex CD Rate Active (SYNTH) ETF (459580) is an actively managed ETF. It invests more than 60% of its assets in instruments such as bonds and derivatives linked to deposit interest rates, and uses the KAP CD Index (Total Return) as its benchmark, seeking to generate returns that exceed the benchmark. The KAP CD Index (Total Return) is constructed by tracking certificate of deposit (CD) yields published daily by Korea’s Financial Investment Association. The SAMSUNG KODEX Money Market Active ETF (488770) is also an actively managed ETF, and invests more than 60% of its assets in domestic bonds, among other instruments. It uses the KAP MMF Index (TR) as its benchmark and seeks to achieve returns above the benchmark. The KAP MMF Index (TR) represents short-term money market performance and is composed of instruments and reference rates such as KOFR, call options, CDs, commercial paper, electronic short-term corporate bonds, and short-dated bonds with remaining maturities of one to three months, among others.

In other markets worldwide, similar cash management ETFs can also be found, such as Australia’s BetaShares Australian High Interest Cash ETF, China’s Yinhua Rili ETF, and Canada’s US High Interest Savings Account Fund ETF. These ETFs are primarily attractive to investors seeking returns above cash deposit rates while maintaining high liquidity. They also typically provide regular monthly income distributions to support a stable cash flow.

Applying the ESG concept to ETFs has also been a popular trend in recent years. However, the evolution from initial investor support for ESG to a subsequent anti-ESG backlash highlights the contentious nature of applying ESG concepts to financial products. Global issuers also hold differing views on ESG investing. For example, according to reports in 2024, BlackRock shifted from ESG investing to “transition investing.” For BlackRock, the investment approach is no longer solely about rewarding companies that already perform well on ESG metrics. Instead, it has moved toward engaging with companies that are actively working to transition their business models to sustainability. This shift reflects BlackRock’s recognition that merely rewarding strong ESG performers may not drive meaningful progress. It also marks a change from passive “rewarding” to active “engagement” and “support.”

Europe, long a strong advocate of ESG, has also come to recognize greenwashing as a key issue in the development of ESG. Therefore, in 2024 the European Securities and Markets Authority (ESMA) issued guidelines governing the use of ESG and other sustainability-related terms in fund names, which will come into effect by the end of May 2025. According to reports, the rules have prompted hundreds of funds to rename themselves. This is because some ETFs or funds whose names previously included terms such as “environmental” or “impact” were, in fact, invested in part in companies with petrochemical operations, and many therefore moved to change their names. Common replacement terms include “screened,” “transition,” “improve,” “progress,” and “evolution,” among others. The measures have also led to short term outflows from stocks of petrochemical related companies, as some funds opted not to rename and instead withdrew capital in order to comply with the new rules.

According to an April 2025 report[4], Morningstar noted that U.S. investors have withdrawn assets from ESG funds for ten consecutive quarters. These developments may be related to U.S. President Donald Trump’s opposition to ESG. In addition, some U.S. states have enacted anti-ESG legislation and have derided ESG investing as “woke capitalism,” which has led major issuers to scale back ESG product development. However, some studies suggest that such anti-ESG measures may cause losses for public pension funds by constraining investment choices and limiting access to broader markets.

From a global perspective, global sustainable funds (global sustainable open-end and exchange-traded funds) recorded net outflows of US$8.6 billion in the first quarter of 2025[5]. Overall investment momentum appears to have moderated, although some commentators maintain that the space still presents significant opportunities. At the same time, it is also important to consider how active management is being applied in ESG ETFs. Traditional passive ESG ETFs may, because their screening criteria can be imperfect and relatively fixed, end up including companies that are effectively “greenwashing.” By contrast, active management allows portfolio managers to adjust holdings more flexibly and conduct deeper fundamental analysis, helping to avoid screening errors. In addition, passive ESG ETFs may assign different scores to the same company due to differences in underlying data and variations in ESG rating methodologies. At the same time, rapid technological progress can cause ESG assessment standards to evolve quickly, which may also affect whether the screening process ultimately identifies companies that truly align with ESG requirements. Active management not only makes it possible to exclude certain controversial companies, but may also better align with investors’ demand for “genuine sustainability.” However, active management also faces questions regarding higher expense ratios and whether its performance can truly outperform passive indices. Managing more complex ESG strategies likewise requires a robust research team. As investors place higher expectations on sustainability and transition, further and more in depth development in the ESG ETF space is expected.

 
[4] https://www.cnbc.com/2025/04/28/trump-esg-funds-backlash.html
[5] Sustainalytics Insight: Record outflows to global sustainable funds.

Thematic ETFs have evolved from simply tracking a single traditional industry to taking a more granular and forward-looking approach that seeks to capture major trends that are reshaping the world and offer long-term growth potential. This evolution has driven rapid growth in thematic ETFs.

For example, within technology themes, beyond traditional ETFs that track chips and the semiconductor industry, the market has also seen the rise of ETFs focused on AI and robotics, such as the Global X Robotics & Artificial Intelligence ETF. This ETF invests not only in companies that produce AI chips or software but also in global companies across AI application areas such as robotics manufacturing, automation, and machine vision. It captures the trend of how AI is being deployed in real world applications and transforming industries across the economy. In addition, there are ETFs focused on gene editing and biotechnology, such as the ARK Genomic Revolution Multi-Sector ETF, which actively invests in leaders and innovators across biotechnology fields including gene sequencing, gene editing, and molecular diagnostics. It invests in how breakthrough advances in life sciences may reshape healthcare, agriculture, and even humanity itself.

The ongoing innovation and evolution of financial products also reflect how issuers and investors view the forces shaping next generation trends. For example, many ETFs aim to capture shifts in social trends and next generation developments. The Roundhill Ball Metaverse ETF invests in companies expected to benefit from the metaverse concept, including virtual platforms, immersive content, and payment systems. There are also ETFs focused on environmental themes, such as the First Trust Water ETF. This ETF invests in companies that benefit from drinking water infrastructure, water treatment, and water resource management services, reflecting the long-term trends of increasing global water scarcity and aging infrastructure. At the same time, some ETFs focus on the future of food. For example, the VegTech Plant-based Innovation & Climate ETF is the first plant-based ETF. This ETF invests specifically in companies expected to benefit from “future food” innovations, such as plant-based alternative proteins, cultivated meat, and sustainable agricultural technologies. It represents a fundamental shift in the food industry, from production to consumption patterns.

It can be seen that contemporary thematic ETFs now cover almost every aspect of daily life and are also shaping next generation lifestyle trends. In addition, thematic ETFs are closely aligned with investors’ lives. In response to political, economic, and legal developments, issuers have also launched niche themed ETFs to meet investor demand. For example, the Unusual Whales Subversive Democratic Trading ETF, launched in 2023, is based on the view held by many investors that the trading activity of U.S. Members of Congress may have investment value because it may involve special information. Among them, the investment performance of former Speaker Nancy Pelosi has drawn particular attention. Therefore, this ETF primarily invests in the securities disclosed by Democratic lawmakers in the United States, or by their family members.

Investment behavior itself reflects investors’ expectations for the future. When issuing thematic ETFs, issuers also pay close attention to investor demand and develop products accordingly. By observing thematic ETFs across different markets, we can gain a practical understanding of today’s most prominent themes and, to some extent, a glimpse into the world’s future development trends.

With reference to the major international development trends, these developments can help catalyze the growth of Taiwan’s ETF market. Taiwan’s ETF market is primarily divided into two markets, namely the Taiwan Stock Exchange Corporation (TWSE) and the Taipei Exchange (TPEx). According to data from the Taiwan Depository and Clearing Corporation (TDCC) FundClear Fund Information Observatory, as of the end of August 2025, the assets under management of ETFs listed on the TWSE were approximately NT$3.9 trillion, of which ETFs with domestic constituents accounted for 81% of total assets under management. The assets under management of ETFs listed on the TPEx were approximately NT$2.8 trillion, of which bond and fixed-income ETFs accounted for 99% of the total assets under management.

Since listing its first ETF in 2003, the TWSE has progressively developed Taiwan equity ETFs across a broad range of structures, including market-cap ETFs, sector ETFs, and thematic ETFs. In 2009, it also collaborated with Hong Kong to introduce its first cross-border ETFs, feeder ETFs, and other products. It then listed leveraged and inverse ETFs in 2014, driving growth in ETF trading value in Taiwan. Thereafter, commodity leveraged and inverse ETFs, VIX ETFs, and REITs ETFs were introduced in 2016. In recent years, ESG, high-dividend, and other smart beta or thematic ETFs have also been listed. By the end of 2024, the TWSE further opened the market to active ETFs, multi-asset ETFs, and other products. In terms of ETF assets under management, trading value, number of beneficial owners, and product diversity, the TWSE remains the primary trading venue for ETF investors in Taiwan.

The following sections discuss the implications of the trends outlined above for the development of Taiwan’s ETF market.

(I) Feasibility of Establishing and Advancing the Relevant Regulatory Framework

Taiwan’s ETF market has, since the regulatory changes introduced at the end of 2024, permitted issuers to launch active ETFs and passive multi-asset ETFs. Under the current framework, active ETFs are permitted to invest directly in equities or bonds but are not yet allowed to invest in other constituent securities, and they are required to adopt a fully transparent structure. Observing developments in other jurisdictions, this paper considers that, in order to promote the sound development of products and the overall ecosystem in Taiwan’s ETF market, Taiwan may draw on international experience and consider gradually establishing the relevant regulatory framework.

First, regulators may consider allowing issuers to adopt a fund-of-funds structure, thereby facilitating the construction of product portfolios and the issuance of portfolio ETFs. Allowing issuers to include ETFs as constituent securities would also help them build investment strategies at a lower cost. In the global asset management market, using ETFs as underlying investments in a fund-of-funds (FoF) structure is already a fairly common practice. This is particularly the case in major markets in the United States, Europe, and Asia, where ETFs are incorporated into multi-layer asset allocation frameworks and have become one of the core tools for improving asset management efficiency and reducing costs. As of August 31, 2025, based on Bloomberg Terminal data, among 342 multi-asset ETFs worldwide, 230 hold ETFs as constituent holdings. In other words, approximately 66.7% of multi-asset ETFs operate using a portfolio-fund ETF approach, which is currently the mainstream method used by issuers in various markets to construct multi-asset ETFs.

Whether to allow ETFs to adopt a fund-of-funds structure is also one of the key factors determining whether target date ETFs can be launched in Taiwan. A Target Date ETF is an investment vehicle that combines retirement planning with the trading convenience of an ETF. As the target date (typically the investor’s expected retirement year) approaches, this type of ETF dynamically adjusts its asset allocation, gradually shifting from a higher equity weighting toward lower risk assets such as bonds, so that investors can obtain a risk return profile that better aligns with different stages of life. To achieve such dynamic adjustments, issuers typically allocate assets across multiple equity and bond ETFs. A fund-of-funds (FoF) structure enables broader diversification and can also make portfolio management more convenient.

As global financial markets become increasingly complex, investors’ demand for asset allocation tools has grown more diverse. Taiwan’s ETF market is currently dominated by passive index-tracking products. While such products offer advantages in terms of low costs and transparency, they may lack flexibility and room for adjustment during periods of severe market volatility or under specific economic conditions, thereby posing risk management challenges for some investors. Based on the above, enabling the development of actively managed multi-asset ETFs has gradually emerged as a market need with significant potential. Although Taiwan announced in 2024 that it would allow passive multi-asset ETFs and active ETFs, the market still lacks actively managed multi-asset ETFs that combine the strengths of both, particularly in terms of product design for target date ETFs. Such products can provide dynamic asset allocation tailored to investors’ different financial goals and time horizons. If combined with an active management mechanism, they would enable portfolio adjustments in response to market volatility or shifts in the macroeconomic environment, helping to manage downside risk more effectively and improve asset allocation efficiency.

In addition, Taiwan investors’ acceptance of “one stop” asset allocation tools continues to increase, as evidenced by capital inflows into multi-asset funds and target date retirement funds. Allowing the development of actively managed multi-asset ETFs would not only respond to investors’ needs for long-term, steady allocation and risk management, but also help broaden the diversity of ETF products and promote the overall development of the capital market.

Second, issuers could be permitted to structure products using more sophisticated strategies. For example, the covered call strategy has a long history in overseas markets and has in fact been applied in domestic products, such as the “Yuanta Weighted Covered Call Strategy N (ETN).” However, in practice, Taiwan has not yet seen the issuance of an ETF based on this strategy. Covered call ETFs can offer a range of benefits to Taiwan investors. First, a covered call strategy can provide investors in Taiwan with a new way to seek more stable income. At present, the primary source of cash flow for many local investors comes from stock dividends. The introduction of covered call ETFs would offer an additional option, as option premium income is typically generated and distributed on a monthly or quarterly basis – and, in some cases, even weekly – which is generally more frequent than dividend distributions. This can be particularly attractive to investors who require steady cash flow, such as retirees.

Options trading is typically more complex and involves a higher threshold for most retail investors. A covered call ETF packages this professional strategy into a simple ETF product, lowering the barriers for the general investing public to access options-based strategies. This not only allows more investors to benefit from the strategy but also helps enhance investor understanding of options strategies and paves the way for the future launch of additional options-based ETFs. At the same time, given the nature of covered call ETFs, they also involve certain less obvious risks, making investor education essential.

In addition, because covered call ETFs earn option premium income by selling call options, those premiums can help offset losses when equity prices decline modestly. As a result, during periods of market volatility or mild downturns, these ETFs often tend to be more stable than ETFs that simply hold equities, which can help smooth fluctuations in a portfolio’s net asset value. For investors with a lower risk tolerance, this can provide a more effective way to navigate market uncertainty. However, in Taiwan, key issues still need to be clarified, including whether the call options written by a Covered Call ETF may be treated as a source of ETF distributions; how option premium income should be categorized for purposes of distribution items; whether the ETF’s underlying assets should be subject to limitations; whether a Covered Call ETF should be classified as a futures trust fund or a securities investment trust fund; and whether the underlying assets of the written call options must have a specified degree of relatedness to the assets held (e.g. if SPY is held as the underlying asset, may the ETF write call options on QQQ).

Third, there is room to further develop the use of synthetic replication and expand the possibilities for ETF constituent securities. In practice, synthetic replication in Taiwan is currently limited to certain types of ETFs, such as leveraged and inverse ETFs, which achieve index-tracking exposure through investments in financial derivatives such as futures and options. Whether under passive or active management, synthetic replication gives issuers greater flexibility in managing portfolio constituents and creates opportunities to develop new types of products. For example, the cash management ETFs discussed above, which primarily invest in money market instruments, also frequently employ synthetic replication. In addition, if covered call ETFs are permitted to adopt synthetic replication mechanisms, this would enhance flexibility in asset allocation and risk management and enable issuers to design innovative ETF products that combine income-oriented features with risk-hedging functions. Such a move would not only respond to investors’ increasingly diverse needs but also help enrich Taiwan’s capital market product architecture and strengthen its overall international competitiveness.

(II) Expanding the Diversity of Thematic ETFs and International Collaboration

Taiwan’s ETF market already offers a wide range of thematic ETFs. In recent years, several popular products, such as ETFs that combine ESG factors with high-dividend strategies, have been well received by investors. However, it is also important to note that, internationally, while many investors continue to support ESG, anti-ESG sentiment has also been gaining traction, and investors’ attitudes toward ESG have become increasingly uncertain. Industry participants may consider launching products that better align with investors’ needs and the latest trends. In selecting constituents, they may also move beyond a purely ESG-metrics-based approach toward deeper, company-level analysis, such as examining each issuer’s environmental contributions and, by incorporating active management, making an integrated assessment across multiple factors to identify high-quality companies and sectors that both meet sustainability objectives and demonstrate durable growth potential.

Of course, diversification in thematic ETFs is not limited to ESG. Taiwan has substantial research capacity and practical experience across industry, government, and academia. Through continued exchange and collaboration, stakeholders can explore emerging trends and develop products that reflect the characteristics of Taiwan’s market. In addition, by participating in international conferences, forums, and study visits, market participants can engage with overseas issuers and regulators on the latest global developments and keep pace with evolving market dynamics.

(III) Building A More Robust Ecosystem and Exploring Next Generation ETFs

As of the end of August 2025, Taiwan’s ETF market comprised 22 issuers and 66 securities firms. Over the past decade, assets under management in Taiwan ETFs have grown by 35 times, making Taiwan the third-largest ETF market in the Asia-Pacific region, behind only Japan and China. Since its development began in 2003, Taiwan’s ETF ecosystem has benefited from substantial efforts by market participants. Meaningful progress has been made in investor education, product development, and regulatory frameworks, resulting in a market of considerable scale and maturity. As a next step, Taiwan could further encourage international issuers to launch products locally, bringing in a broader range of globally relevant themes and expertise. In particular, as discussed above, an increasing range of strategies and instruments can be “ETF-ized.” For example, covered call ETFs “ETF-ize” option-based strategies, while cash management ETFs “ETF-ize” short-term rate instruments such as money market funds. These “ETF-ized” products make underlying strategies and tools more accessible to retail investors, enabling a broader investor base to participate in areas that were previously difficult to access.

Taiwan’s ETF market has developed over more than two decades. In the decade ahead, we will face a more volatile global market, more complex geopolitical challenges, and a growing array of novel and innovative alternative products. Accordingly, we must deepen our understanding of the distinctive features of overseas markets, leverage Taiwan’s strengths, and proactively expand the reach and footprint of Taiwan’s ETF market. Regulators, market infrastructure institutions, industry participants, market makers, securities firms, trade associations, and investors must work together, each contributing their expertise so that the market is fully prepared to respond to rapidly changing conditions. Only through unity can we build a stronger market foundation; only through concerted efforts across all levels can we meet new challenges head-on. We look forward to the continued flourishing of Taiwan’s ETF market over the next decade and to its becoming a key engine driving Taiwan toward its goal of becoming an asset management hub in Asia.