New York, October 19th / PRNewswire / -- According to Fly On Wall Street News Commentary, Taiwan's benchmark stock index has risen by 62% this year, making it one of the best-performing major global stock indices. Bloomberg reported on October 16th that some professional fund managers and analysts in Taiwan are resigning to invest their own money instead. Strict regulations prevent them from trading stocks they have selected for their clients. With about one-tenth of the stocks in Taiwan's index having more than doubled in value this year, some believe that this trade-off is no longer worth it.
The companies and funds mentioned in this article include: Taiwan Integrated Circuit Manufacturing Company ( Taiwan Sem token issuance nductor Manufacturing Company Limited, TSMC, NYSE : TSM ), UMC Corporation ( ASE Technology Holding Co., Ltd., NYSE : ASX ), United Microelectronics Corporation ( United Microelectronics Corporation, NYSE : UMC ), iShares MSCI Taiwan ETF ( NYSE Arca : EWT ) as well as The Taiwan Fund, Inc. ( NYSE : TWN ).
Watching the market through the dressing room
Taiwan has not completely prohibited individual investment, but its asset management industry's code of conduct stipulates that employees are not allowed to trade a certain locally listed stock or related derivatives within seven trading days before and after buying or selling the company's funds in that stock; this essentially excludes individuals from making stock selection trades. Fund managers are also required to lock their mobile phones, laptops, and smartwatches every morning until the market closes at 1:30 p.m. In a report in July by Taipei's "Times," it was mentioned that this mobile phone regulation was formalized in 2024 with the aim of curbing insider trading; prior to that, six former fund managers from four companies were prosecuted for trading ahead of others through accounts of relatives and friends.
Cai En, a 40-year-old fund manager ( Ken Tsai ), told Bloomberg that he was still working at a large Taiwanese asset management company until July, but Bloomberg did not disclose the name of that company. He said that in 2024, he selected a Taiwanese manufacturer of server data transmission components ( AI ) as the largest holding in his fund, but he personally did not hold any shares in that company. "That gave me a strong sense of relative deprivation," he said. He now works at a private investment company in Taipei, the name of which also has not been disclosed. Salary is also one of the attractions: Bloomberg cited data from headhunters and recruitment companies stating that the annual salary for portfolio managers in Taiwan ranges from $124,000 to $311,000, which is lower than the basic salary levels in Hong Kong.
The private institutions they join are not subject to these rules. These institutions are registered with the Ministry of Economics as private companies, and since they do not raise public funds, they do not need to apply for an asset management license from the Financial Supervision and Management Commission. Brokers told Bloomberg that some of these institutions now have a monthly trading volume of over 10 billion New Taiwan Dollars, which is comparable to that of medium-sized asset management companies.
The Rising Market Behind the Wave of Resignations
This round of increase is largely due to the AI hardware supply chain. TSMC announced on October 15 that its revenue for the third quarter was NT$1.49 trillion (US$46.7 billion), a year-on-year increase of 50.9%; net profit increased by 68.7%, and the gross margin reached 66.4%. The company provided a revenue forecast for the fourth quarter of US$52.3 billion to US$54.3 billion.
The chip packaging and testing business has also benefited from the same upward trend. UMC announced that its consolidated revenue in September was NT$88.1 billion, a year-on-year increase of 45.5%; its revenue for the third quarter was NT$244.2 billion, a year-on-year increase of 44.8%.
UMC, a mature process foundry, announced that its sales in August increased by 30.71% year-on-year, driving a 14.66% increase in sales from the beginning of the year to date. In its second-quarter report, the company expects the capacity utilization rate in the third quarter to be above 90% and stated that its revenue from 22/28-nanometer products continued to reach new highs.
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It's more like a flow of personnel movement, rather than a mass exodus.
Data indicates that this is more akin to personnel turnover rather than a mass exodus. According to the fund data website MoneyDJ, less than half of Taiwan's 20 largest local stock mutual funds have maintained the same portfolio manager over the past three years. Bloomberg also reported that the number of applications for junior positions at some international companies has roughly halved this year. However, the Financial Supervisory Commission stated that the actual number of registered practitioners in the industry has increased from 4,581 at the end of 2025 to 4,729 in September. Companies are also taking measures to address this: Taiwan's largest foreign-funded asset management firm is offering cross-market analyst positions and office rotations to retain its staff.
Regulatory authorities are also paying attention. On October 15, the Financial Supervisory Commission stated that it is collecting information and plans to review relevant regulations in order to find a balance between market development, conflicts of interest, and investor protection. A senior executive from an asset management firm told Bloomberg that there is currently no simple solution.
Cases from professional institutions
At least one professionally managed fund outperformed the market. The closed-end fund listed in New York, The Taiwan Fund, reported a total return of 47.36% for the fiscal quarter ending May 31, while during the same period, Taiwan's Weighted Average Return Index (TAIEX Total Return Index) was 26.12%; the net asset value per share at the end of that quarter was $116.90.
Investors who prefer to hold the market as a whole can choose iShares MSCI Taiwan ETF. This fund manages assets of approximately $11.9 billion.
Last week, it was reminded that market dynamics can change rapidly. Due to the widespread selling of tech stocks and warnings from TSMC's CEO, Morris Chang, about macroeconomic uncertainties and weak consumer demand, Taiwan's weighted index fell by 4.6%, marking the first weekly decline in five weeks, according to Trading Economics. In New York, as per Stock Analysis data, as of October 16, TSMC's stock price had fallen by 8.98% to $412.61 from its close on October 9; UMC's stock price fell by 14.86% to $39.53; Powerchip Technology's stock price fell by 13.68% to $19.82; iShares fund's value fell by 7.04% to $106.26; and The Taiwan Fund's stock price fell by 8.78% to $94.18. For those managers who have just started trading their salaries from their own accounts, these fluctuations now affect them personally.
The Taiwan index fell by 4.6% in a single week. If you want to understand the chart analysis behind this trend, you can obtain the free guide “Stock Preachers” and the “The Roadmap” market report at stockpreachers.com.
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This article is an independent news commentary. Fly On Wall Street is wholly owned and operated by Market Equities Limited (“MEL”). MEL is a company registered under Irish law. MEL has not received any compensation from any fund sponsors or companies mentioned in this article. MEL and its owners, operators, directors, and related parties currently do not hold any shares in the funds or companies mentioned in this article, but retain the right to buy and sell such shares at any time without prior notice. The weekly price changes of U.S.-listed stocks are based on data from Stock Analysis from the close on October 9, 2026, to the close on October 16, 2026, and do not include distributed earnings. The information is sourced from company and fund announcements, regulatory filings, published reports, and third-party data considered reliable, but no guarantee is provided for its accuracy. Investing in securities involves risks, including the risk of losing part or all of the investment. This article is governed by Irish law.
