In April 2025, amidst fluctuations in the Taiwan stock market, market-cap ETFs showed stable performance, with the FT Taiwan Smart ETF leading the way with a 17.3% gain, as the Taiwan stock market climbed back to 20,000 points.

In April 2025, the Taiwan Stock Exchange dropped more than 2,000 points due to global financial market turmoil and exchange rate fluctuations, hitting a low of 17,306 points. However, it quickly rebounded, with the weighted index climbing back to 20,235 points by April 30. Market-cap ETFs showed steady performance, especially the FT Taiwan Smart ETF (00905) by Franklin Templeton SinoAm, which gained 17.3% from April 9 to April 30, highlighting the resilience of its stock-picking strategy amid market volatility.

Taiwan Stock Market Experiences Intense Volatility in April, Index Returns to 20,000 Points

In April 2025, the Taiwan stock market faced multiple challenges both internationally and domestically. Former U.S. President Trump reintroduced tariff measures, causing global market panic and leading to a sharp decline in the Taiwan stock market at the beginning of the month. The weighted index fell significantly from its peak, dropping to a low of 17,306 points, marking a record monthly drop of over 2,000 points.

At the same time, the New Taiwan Dollar surged by more than 11% within a month, appreciating from 33.27 NTD per USD at the beginning of April to a high of 29.59 NTD per USD, a rare appreciation in recent years. The exchange rate fluctuations increased market uncertainty, putting pressure on Taiwan's export-oriented companies, especially those in low-margin industries.

However, as the market gradually digested the tariff and exchange rate risks, coupled with strong earnings reports from tech stocks, leading stocks such as TSMC and MediaTek led the rebound. The Taiwan stock market began a strong recovery from its low on April 9, eventually closing at 20,235 points on April 30, successfully reclaiming the 20,000-point mark, with the decline narrowing significantly to 460 points.

Market Cap ETFs Break Through Adversity, FT Taiwan Smart Shines Brightest

Amidst the intense volatility and alternating market conditions, market cap ETFs demonstrated high resilience. According to CMoney statistics, during the rebound period from April 9 to April 30, the top ten market cap ETFs saw gains ranging from 13.69% to 17.3%, outperforming the broader market.

Among them, the FT Taiwan Smart ETF (00905) led with a 17.3% gain, ahead of other market cap ETFs. Issued by Franklin Templeton SinoAm, this ETF employs a stock selection strategy that integrates the three major factors of "value," "quality," and "momentum," overcoming the traditional market cap index's limitation of being overly concentrated in a few leading stocks and enhancing portfolio resilience through a dynamic adjustment mechanism.

Following closely was the Fubon Flagship 50 ETF (009802) with a 17.23% gain, and the Yuanta Taiwan Sustainable ESG ETF (00850) ranked third with a 16.41% gain. Other notable market cap ETFs included Cathay Taiwan Leader 50 (00922), Yuanta MSCI Taiwan (006203), and SinoPac Taiwan Weighted (006204), all with gains exceeding 15%.

Below is the ranking of the top ten market cap ETFs by gain from April 9 to April 30:

Stock Selection Strategy and Advantages of FT Taiwan Smart ETF

The outstanding performance of the FT Taiwan Smart ETF is closely related to its unique stock selection logic. The index tracked by this ETF combines three core factors:

• Value Factor: Selects companies with reasonable valuations and long-term investment appeal;
• Quality Factor: Screens for financially sound companies with strong profitability;
• Momentum Factor: Includes stocks with strong recent price performance and high market interest.

This multi-factor strategy helps reduce risk during market downturns and quickly participate in upward trends during rebounds. Compared to traditional market cap ETFs that may be overly concentrated in a few leading stocks like TSMC, FT Taiwan Smart enhances the stability and growth potential of the overall investment portfolio through diversified allocation and dynamic adjustments.

Taiwan Stock Market ETF Continues to Expand, Market Cap Products Attract Attention

According to the Securities Investment Trust and Consulting Association, as of the end of March 2025, the total number of Taiwan ETFs has surpassed 260, with a total market size of over 6.5 trillion NTD. Market cap ETFs, as core allocation tools, continue to be favored by investors. The recently listed Hua Nan Taiwan Select 50 ETF (009808) is also a market cap product, indicating that demand for such ETFs continues to grow.

Additionally, established market cap ETFs like Yuanta Taiwan 50 (0050) and Fubon Taiwan 50 (006208) have responded to market demand by splitting stocks and adjusting fees, further increasing investor willingness to participate. In April alone, the number of beneficiaries of 0050 increased by 85,000, showing its enduring popularity.

References

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