TECH - AI Craze Fuels Taiwan ETF Boom Raising 'Concerns' Over Market Stability: 'How Much Higher Can They Go?' | Benzinga
The AI frenzy is driving a surge in Taiwan’s ETF market, raising concerns among analysts and regulators about the market’s stability.
What Happened: The Taiwan ETF market has seen a significant influx of capital as investors seek exposure to the AI supply chain, Reuters reported. This has led to a shift in the ownership structure of the $2 trillion market, which is a geopolitical flashpoint.
The ETF sector in Taiwan, valued at T$4.74 trillion ($145.8 billion) as of March, has seen a 77% increase from the previous year. This growth far outpaces the 20% rise in the benchmark equity index.
However, the rapid inflow of investments, much of which is leveraged, has raised concerns about a potential market reversal. Regulators and ETF managers worry that less experienced investors could face significant losses if the market sours or geopolitical tensions with China escalate.
“Our clients have concerns. Taiwan stocks have risen above 20,000 points. How much higher can they go?” said Peter Yang, manager of an ETF launched by Fuh-Hwa Securities Investment Trust.
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