TECH - Key Apple Supplier TSMC's 42% Stock Surge Prompts Weighting Limits For Some Funds: What You Need To Know | Benzinga
The soaring stock of Taiwan Semiconductor Manufacturing Co (NYSE:TSM) has led to restrictions on single-stock exposure for some investors, potentially forcing them to seek alternative investments.
What Happened: TSMC’s shares have surged by 42% in Taipei this year, largely due to its dominant position in the production of advanced chips for artificial intelligence, reported Bloomberg.
"The tricky part is that the size of the company is now so big in our benchmark that we cannot meaningfully overweight it, especially funds subject to UCITS which cap single stock exposure to 10%," said Zhikai Chen, head of Asian and Global EM Equities at BNP Paribas Asset Management. "It's prompting us to look at some other names that's currently one or two generations behind TSMC's technology to get more active exposures."
This has made TSMC a popular choice among fund managers. However, due to restrictions on single stock exposure, some funds may have to sell TSMC ...