Thriving Development of the ETF Ecosystem

The Taiwan Stock Exchange (TWSE) plays a central role in promoting the development of Taiwan’s ETF ecosystem, demonstrating the innovation and resilience of the country’s capital market. As the primary platform connecting investors with industries, the TWSE views ETFs as an essential vehicle for deepening market participation and enhancing financial inclusion. Through a coordinated approach involving market infrastructure, regulation and investor education, the TWSE continues to advance its ecosystem and broaden its international footprint. This work focuses on three strategic priorities: building a comprehensive ecosystem, introducing innovative products and enhancing investor education.

Building a Comprehensive Ecosystem

Over the past decade, Taiwan’s ETF market has outperformed most economies in terms of growth. Globally, ETF assets under management (AUM) grew about 5.4 times, while Taiwan’s surged by 36.3 times – roughly 6.7 times faster than the world average. The number of ETF products also increased more than tenfold. By the end of 2024, Taiwan had listed 272 ETFs across its exchanges, with total assets reaching US$195.5 billion. Driven by strong demand for high-dividend and bond ETFs, the total AUM of Taiwan’s ETF market grew by 51.21 percent in 2024, far outpacing the global average of around 25 percent per year. As a result, Taiwan now ranks third in the Asia-Pacific region, following Japan and China.

This rapid growth is closely tied to Taiwan’s industrial progress. From early market capitalisation-based ETFs to overseas equity, high-dividend and thematic ETFs focusing on 5G, electric vehicles and artificial intelligence, Taiwan’s ETF market reflects the strength of its technology and semiconductor industries. This linkage allows investors to participate directly in the performance of core industries, bringing industrial competitiveness into financial products and creating strong market momentum. As a result, ETFs have become a valuable bridge connecting the financial and real sectors, further strengthening the innovation and resilience of Taiwan’s capital market.

A fully integrated ETF ecosystem is key to sustaining this progress, involving index providers, asset management companies, securities brokers and futures firms. Each ETF is supported by an average of six liquidity providers, ensuring a high level of market efficiency. Since the founding of the Taiwan Index Plus Corporation (TIP) in 2016, the number of ETF issuers has grown from five to twenty-two as of August 2025. This collaborative structure enables constant innovation and diversification, forming a solid foundation for long-term development. It also illustrates the TWSE’s capacity to align regulatory coordination, technological infrastructure and market demand to build a globally competitive environment.

Enhancing Investor Education

ETF market sustainability relies not only on product innovation but also on investor understanding and confidence. With more than 13.6 million retail accounts, representing about half of total trading volume, the TWSE places great emphasis on investor education. Through both in-person and digital initiatives, the TWSE actively promotes financial literacy and investment awareness. The ETF Expos held over the past two years have attracted more than 40,000 participants. At the same time, the TWSE’s online learning platform, ETFortune, provides comprehensive educational resources on ETF features, creation and redemption mechanisms, dividend distribution and risk management. These efforts help investors build systematic investment habits, such as regular saving plans (dollar-cost averaging), and encourage disciplined participation in the market.

The results are clear. As of August 2025, the number of ETF investors in Taiwan exceeded 15 million – a nearly ninefold increase compared with 2020. Considering Taiwan’s population of around 23 million, ETF investment has become a mainstream form of financial participation. Most trading activity comes from investors aged 40 to 60, while younger investors in their twenties and thirties increasingly prefer regular saving plans. With an investment threshold as low as NT$100 (around US$3.50), the TWSE’s initiatives have made investing accessible to a broader audience, supporting financial inclusion and wealth accumulation at the grassroots level.

Introducing Innovative Products

Product innovation remains a defining feature of Taiwan’s ETF success. Since 2003, the TWSE has worked with the Taiwan Index Plus Corporation (TIP), its index service subsidiary, along with other stakeholders, to introduce a wide spectrum of ETFs aligned with market trends and investor needs. The 2023 launch of Taiwan’s first monthly payout high-dividend ETF drew widespread retail participation and further boosted public interest in ETFs. Unlike markets that rely on a seed fund model, Taiwan adopts a public subscription approach, which encourages broader participation and has fuelled rapid growth. To improve market efficiency, the TWSE has also established a dedicated creation and redemption platform that streamlines operational processes for ETF issuers as well as liquidity providers, ensuring efficient and transparent market functioning.

In recent years, the TWSE has expanded international collaboration, working with global index companies and asset managers to launch new products, including active and multi-asset ETFs. These developments have diversified investment opportunities and strengthened Taiwan’s standing in global financial markets. In September 2025, the TWSE launched its first cross-border ETF collaboration with Japan, achieving dual listings across both markets. This milestone enhances connectivity between the two economies and allows investors in both countries to share in the growth of Taiwan’s technology sector. The TWSE continues to promote innovative ETF products that align with market development and investor demand. By linking product design to real economic trends, the TWSE aims to encourage wider public participation in investment and support sustainable market growth.

Retail investors form the foundation of the capital market, and financial inclusion has become a shared policy objective across global markets. ETFs play a vital role in realising this vision by offering the public an accessible and efficient way to participate in investment. Looking ahead, the TWSE will remain committed to advancing financial inclusion and expanding investor participation through continued product innovation and education. At the same time, the TWSE is pleased to share Taiwan’s experience in developing a robust ETF ecosystem with exchanges worldwide, fostering collaboration that promotes financial inclusion and sustainable market development.