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Taiwan asset managers report 28% rise in ETF fee income in 2023

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Taiwan fund houses earned NT$9.1bn ($281.1mn) in management fees from exchange traded funds last year, up 28 per cent from 2022, as the local ETF boom drove the market to record highs.

The 16 onshore ETF issuers in the market generated 32 per cent of their total revenue from ETF management fee income, as well as 40 per cent of their overall management fees, according to data from Keystone Intelligence.

Yuanta Funds, the market’s largest ETF provider, ranked first in ETF management income with NT$3.29bn in 2023, up 27.7 per cent from the previous year.

The firm managed NT$1.44tn in assets by end-2023, with 85 per cent coming from its 37 ETFs, according to data from the Securities Investment Trust and Consulting Association.

Yuanta Funds owns two of the largest ETFs in the local market, the Yuanta Taiwan Top 50 ETF and Yuanta Taiwan Dividend Plus ETF. By the end of 2023, the two ETFs had assets of NT$311.76bn and NT$253.57bn respectively.

Cathay Securities Investment Trust ranked second with ETF management fee income of NT$1.74bn, an increase of 29 per cent compared with 2022. It managed NT$701.5bn in ETF assets by end-2023, which accounted for 81 per cent of its total assets under management of NT$867.8bn.

Third-ranked Fubon Investment Trust made NT$1.38bn from ETF management fees, up 25 per cent. The company managed NT$472bn in ETF assets by end-2023, accounting for 88 per cent of its total assets — the largest percentage among all fund houses.

Meanwhile, SinoPac Securities Investment Trust, a mid-size local firm, recorded the highest growth in ETF management fee income among the top 10 fund houses, with a rise of 38 per cent to NT$59mn in 2023.

Total assets in Taiwan-listed ETFs jumped 64 per cent to NT$3.85bn by end-2023 from NT$2.34bn the year before.

Taiwan equities and bond ETFs investing overseas accounted for more than 80 per cent of the net NT$1.23tn in inflows into the local fund market, as more than 1mn new beneficiaries rushed into onshore bond ETFs.

Only two of the 16 onshore ETF issuers are international fund houses — Japan’s Nomura Asset Management and Singapore’s UOB Asset Management.

*Ignites Asia is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at ignitesasia.com

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