Taiwan Stock Market Plunges, Breaking 45,000 Points! Volatility Sparks Investor Anxiety, Experts Offer Balanced Investment Strategy

Major global stock markets have recently experienced sharp swings. Taiwan's market opened higher today (24th) but saw intense volatility, suddenly plunging near 10 a.m. By the time of reporting, it had dropped nearly 300 points, breaking below the 45,000-point threshold. Financial institutions note that in recent years, global capital has been heavily concentrated in AI and technology stocks. As market volatility increases, the risks of overexposure to single markets and sectors are gaining attention.

Liu Conglin, manager of the 'Nomura Taiwan-Japan Select Multi-Asset Fund,' set to launch fundraising from August 31 to September 4, states that amid global economic shifts, Taiwan and Japan offer distinct investment characteristics with complementary industrial structures. Taiwan's equity market is nearly 80% weighted in electronics, benefiting from the ongoing global AI wave and semiconductor demand. Taiwan holds a key position in the global tech supply chain, and its corporate earnings growth remains a market focus.

However, the high concentration in tech stocks also means Taiwan's market is highly sensitive to tech industry cycles and valuation changes. Therefore, cross-market and cross-sector allocation can help mitigate volatility from single-industry exposure.

Liu points out that unlike Taiwan's tech-heavy structure, Japan's TSE Index has a more diversified sector composition—electronics and finance combined account for less than 20%, while non-financial and non-electronics sectors exceed 60%, offering strong complementarity to Taiwan's market. Moreover, Japan holds global competitiveness in semiconductor materials and equipment, providing investment opportunities distinct from Taiwan's tech exposure.

Additionally, Japan's economy is gradually emerging from long-term deflation, with corporate wage hikes boosting domestic demand. Coupled with the Tokyo Stock Exchange's corporate governance reforms, companies are increasingly prioritizing capital efficiency and shareholder returns, including improving ROE, increasing dividends, and conducting share buybacks.

Liu believes that leveraging Taiwan's tech and AI growth momentum alongside Japan's industrial diversity and corporate value re-rating can help portfolios pursue growth while enhancing sectoral diversification.

Nomura Asset Management emphasizes that while capturing equity market growth is essential, downside risk management is equally critical in multi-asset strategies. Over the past five years, a portfolio combining Taiwan and Japan equities with diversified bonds achieved a 94% cumulative return and a risk-return ratio (Sharpe ratio) of 1.35—outperforming traditional U.S. or global equity-centric bond-stock allocations, demonstrating the efficiency of a Taiwan-Japan dual-market, multi-asset approach.

More exclusive insights from Feng Media: • New fractional share trading rules take effect December 7! Trading starts at 9 a.m.—key points investors must know • Institutional investors aggressively buying! Since August, their top purchases are exclusively Taiwan ETFs, with several outperforming the broader market • Bull market confidence remains strong! Fund managers' cash levels drop to a rare 3.5%, with AI bubble and bond market chaos as top risks