Three Major Institutions Go All-In! Since August, Top Buys Are Exclusively Taiwan Stock ETFs, With These Outperforming the Market

After enduring July’s 'deleveraging' shock, the market finally regained momentum in August. However, recent spikes in U.S. Treasury yields have pushed markets into high-level volatility once again. As capital rotation accelerates and market swings intensify, the investment targets favored by the three major institutions are becoming crucial indicators of fund flows.

According to stock exchange data on institutional trading activity, the top 10 most heavily bought securities since August have all been Taiwan stock ETFs, with net purchases ranging from 160,000 to 1.59 million shares. Supported by institutional demand, these 10 ETFs have delivered strong performance over the past month—gaining between nearly 5% and as high as 12.70%, outperforming the broader market across the board.

Notably, actively managed funds such as Cathay Dynamic High Dividend (00400A), Kai Chi Taiwan Active (00407A), and Fuhua Future 50 Active (00991A) achieved double-digit gains, standing out as leaders among the institutions’ top buys.

Market analysts note that since August, the three major institutions have accumulated over 100,000 shares in 20 different securities: 14 Taiwan stock ETFs (including leveraged products), 2 cross-border equity ETFs, and 4 individual stocks. Among the 14 Taiwan ETFs, nine are actively managed, indicating that amid Taiwan’s recovery rally, institutions are prioritizing active ETFs capable of agile portfolio adjustments, adapting to rapid capital shifts, and demonstrating stock-picking expertise.

The research team behind Kai Chi Taiwan Active (00407A) stated that global equity markets have recently fluctuated due to noise around tech giants’ free cash flow and rising long-term U.S. bond yields. However, returning to fundamentals, the five major CSP providers are expected to maintain high capital expenditures over the next two years, with further upward revisions anticipated through 2028. As a primary contributor and beneficiary of the booming global AI industry, Taiwan’s economy and corporate earnings are poised for sustained high growth.

KGI Asset Management believes Taiwan’s EPS growth will remain in double digits annually over the next three years, driving a long-term bullish trend in the stock market and potentially lifting valuations. Actively managed Taiwan stock ETFs, combining human-AI collaboration for quantitative breadth and fundamental depth, offer flexible diversification, manage concentration risk in semiconductors, and reinvest all dividends to maximize compounding returns—making them an excellent vehicle for investors to capture Taiwan’s long-term upside.