Japan's first exchange-traded fund ( ETF ) investing solely in Taiwan equities has been listed on the Tokyo Stock Exchange.

The listing marks a significant milestone in cross-border capital market collaboration and enhances worldwide investor access to Taiwan's dynamic technology sector, according to the Taiwan Stock Exchange ( TWSE ).

The ETF, issued by Daiwa Asset Management, tracks Cathay SITE's 00881 Taiwan Technology Leaders ETF and represents the first Japan-listed ETF directly tied to the Taiwan stock market.

The iFreeETF Cathay Taiwan Tech Leader Index offers Japanese investors exposure to Taiwan's high-growth technology sector, where artificial intelligence ( AI ) and semiconductor companies play a dominant role. Technology stocks currently account for approximately 72% of Taiwan's total market capitalization.

TWSE president Edith Lee, who attended the listing ceremony in Tokyo for the ETF, says Taiwan's equity market has benefited significantly from the surging global demand for AI and advanced semiconductor technologies, with the benchmark index reaching successive record highs and ETFs experiencing robust growth in investor participation.

She also notes that Japan's equity market has rallied nearly 80% since 2020, including a gain of over 10% year-to-date, underscoring the strong growth momentum in both markets.

Robust ETF market

Since its inception in 2003, Taiwan's ETF market has grown to become the third largest in the Asia-Pacific region, TWSE says. As of the end of August 2025, a total of 294 ETFs were listed, with combined assets under management of NT$6.77 trillion ( US$210 billion ). Over the past decade, the market has expanded more than 30-fold, significantly outpacing the 5.4-fold growth of the global ETF market during the same period.

Investor participation has also broadened substantially, with over 15 million individuals now holding ETF positions, equivalent to nearly two-thirds of Taiwan's population. Trading activity is dominated by high-dividend and technology-focused ETFs, reflecting strong retail demand alongside increasing institutional engagement.

During their visit to Tokyo, TWSE officials also held meetings with the Japan Exchange Group, local asset managers, and industry associations to exchange views on ETF market development and promote Taiwan's capital market.

"This listing represents an important first step," Lee says. "We look forward to further collaboration between exchanges and asset managers to introduce additional cross-border products."

The TWSE remains committed to broadening product diversity and pursuing international partnerships, in line with Taiwan's vision to become a leading asset management hub in Asia, she adds. 

Photo: Representatives attend the Daiwa Asset Management ETF listing ceremony in Tokyo on September 12. ( TWSE )