JPMorgan Asset Management is issuing its first Taiwan-focused wealth management product in more than a decade, joining global rivals rushing into one of Asia’s hottest exchange-traded funds markets.
The US asset manager said on Wednesday that it will adopt an active investment approach, selecting cash equities and index options for its ETF. Taiwan’s $260 billion ETF market boasts the highest retail participation in Asia.
“Investors seek high and stable cash distributions but often complain that net asset value doesn’t keep up,” Henry Tong, head of JPMorgan Asset Management Taiwan, said at an event on Wednesday. Tong said the new fund would generate income through option premiums.
Global asset managers in Taiwan are expanding into ETFs - a space dominated by local firms — as they seek to tap booming retail demand for assets that can offer higher returns than traditional bank deposits and insurance policy-tied instruments. Taiwan is home to Asia’s third-largest ETF market behind Japan and China, according to industry group data.
Buoyed by regulatory easing last year, Allianz Global Investors and Nomura Asset Management, along with major local fund houses, have already launched 11 ETFs investing in Taiwanese equities and targeting benchmark-beating returns through active strategies.
JPMorgan’s fund will be its first one focused on Taiwanese assets since 2010. Cathay Securities Investment Trust, the island’s second-largest asset manager, is also set to begin fundraising next week for its own active Taiwan equity ETF.
Regulators last year began allowing a broader range of fund products as part of efforts boost the asset management sector and position the island as a regional wealth hub.
