(Bloomberg) -- Investors plowed money into exchange-traded funds that buy Taiwanese stocks last week amid broad optimism over the outlook for Asian equities.
Inflows to U.S.-listed emerging market ETFs that invest across developing nations as well as those that target specific countries totaled $466.4 million in the week ended Oct. 18, compared with gains of $5.45 billion in the previous week, according to data compiled by Bloomberg. So far this year, inflows have totalled $20.1 billion.
Across the region, Taiwan had the biggest inflow, of $317 million, led by iShares MSCI Taiwan. The optimism around semiconductors manufacturers on the back of a global boom in AI-related companies is boosting allocations into Taiwan, home to the world’s biggest chipmaker,
“The Taiwan ETF is heavy on the semiconductor manufacturers like Taiwan Semiconductor Manufacturing Company,” said Andy Wester, a portfolio manager at Sandia Investment Management. “If semis keep staying strong I’d expect Taiwan to follow.”
Last week, shares of Taiwan Semiconductor Manufacturing Co. hit a record high after the chipmaker topped quarterly estimates and raised its target for 2024 revenue growth, allaying concerns about global chip demand and the sustainability of an AI hardware boom.
Inflows into exchange-traded funds that buy emerging market stocks have been on a roll in recent weeks, driven by optimism about China’s wave of stimulus to revive its battered market. Much of that money has gone into China itself.
“We are seeing better sentiment to Taiwanese-focused ETFs as other Asian emerging markets improve on expectations the region shows strength in ‘25,” said Todd Rosenbluth, head of research at TMX VettaFi. “If China’s economy improves, it’s likely to provide a tailwind for other markets.”
The SPDR Portfolio S&P Emerging Markets ETF, which has allocations across China, India and Taiwan, also saw strong inflows. The fund, known for its ticker SPEM, recorded $287 million in new money, the biggest weekly gain since 2022.
- Stock ETFs expanded by $438.5 million.
- Bond funds rose by $27.9 million.
- Total assets fell to $381.4 billion from $384 billion.
- The MSCI Emerging Markets Index closed down 0.4 percent from the previous week at 1,155.12 points.
- Taiwan had the biggest inflow, of $317 million, led by iShares MSCI Taiwan.
- South Korea had the biggest outflow, of $135.2 million, following withdrawals from iShares MSCI South Korea.
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Following are tables detailing net flows for emerging-market ETFs in US dollars. The data include the holdings-weighted allocations from multi-country funds, as well as country-specific funds. Latest and historic flows are allocated using latest fund weightings (figures in USD millions unless otherwise stated):
Regional Summary
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Americas
Asia Pacific
Europe, Middle East & Africa
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