Taiwan ETF Management Fees Soar to $420 Million in 2024
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Taiwan’s exchange-traded fund (ETF) sector is experiencing a remarkable boom this year, with ETF issuers projected to collect a staggering $420 million in management fees. This surge represents a 50% increase in revenues from locally listed ETFs, building on the impressive NT$9 billion ($280 million) already earned in the first eight months of the year. According to a recent report from Keystone Intelligence, the total fee income for 2024 is expected to reach NT$13.5 billion, matching the NT$9.08 billion accumulated throughout the entire previous year. This marks a significant leap from the NT$7.08 billion collected in 2022, highlighting the rapid expansion of Taiwan’s ETF market. Despite ETFs typically offering lower fees compared to standard mutual funds, the NT$9 billion in total ETF management fees accounted for approximately one-quarter of the NT$36 billion total industry fee income across all investment funds last year. Taiwan ETF Fees Surge in 2024 Management fees for ETFs in Taiwan vary, ranging from about 30-40 basis points for domestic equities ETFs to as high as 100 basis points for more specialized ETFs. These include international equities and leveraged or inverse equities ETFs, which tend to carry higher fees due to their complex structures and risk profiles. The growth in ETF management fees has paralleled the rapid increase in ETF assets. Over the first eight months of 2024, total ETF assets surged by nearly 50%, rising from NT$3.9 trillion at the end of 2023 to NT$5.8 trillion by the end of August. This expansion shows a strong investor appetite for ETFs, driven by their cost-efficiency, liquidity, and transparency. Donna Chen, founder and president of Keystone Intelligence based in Taipei, attributes the rise in ETF fee revenues to a clear shift among Taiwanese investors towards lower fee ETFs. This trend is squeezing out space for active funds as…
Filed under: News - @ October 26, 2024 9:26 am