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Speaker 1: This podcast is brought to you by HKX, Asia's ETF marketplace. Well,

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Speaker 1: you'll find a gateway to liquidity and a diverse selection

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Speaker 1: and beyond. Search HKX to learn more.

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Speaker 2: Good morning, good afternoon, good evening, and good night's wherever

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Speaker 2: in this vast, beautiful planet you're joining us from. Welcome

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Speaker 2: to Tiger Money, a podcast about all things investing with

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Speaker 2: a twist on exchange traded funds in the Asia Pacific

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Speaker 2: and beyond. I'm David Ingless, non award winning journalist, Bloomberg

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Speaker 2: TV's Chief Markets editor for the Asia Pacific. I'm also

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Speaker 2: the host of The China Show, and my co anchor

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Speaker 2: here is.

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Speaker 3: I'm Rebeccason, head of Asia Pacific ETF research at Bloomberg Intelligence.

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Speaker 3: Taiwan is one of the fastest growing markets for ETFs,

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Speaker 3: with one hundred and eighty four billion US dollars in

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Speaker 3: assets under management. They launched the largest ever at ETF

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Speaker 3: globally this year with more than three point five billion

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Speaker 3: US assets under management. So with that, let's bring in

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Speaker 3: Julian View, chairman of Juanta Securities Investment Trust the largest

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Speaker 3: and first etf issuer in Taiwan. He's the perfect person

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Speaker 3: to tell us what's happening in the market and why

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Speaker 3: investors are looking at Taiwan. Welcome Julian, and thank you

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Speaker 3: for joining Tiger Money. Hi.

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Speaker 4: Hello everyone, this is a Julian.

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Speaker 2: Julian, you guys are a big deal. We know you're

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Speaker 2: a big deal. There might be some listeners out there though,

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Speaker 2: who might not be too familiar with what you guys do.

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Speaker 2: Maybe we could start off if you could just give

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Speaker 2: us a simple introduction of what Juanta does. Can you

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Speaker 2: tell us about the overall business and yeah, what you

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Speaker 2: guys do and who are you so?

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Speaker 4: Yuinta is the first mover in the ETA business in Taiwan.

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Speaker 4: To date, we have been paving the ETA development here

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Speaker 4: in full more than twenty one years. We are the

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Speaker 4: first and also the largest. But however the Taiwan's ETA

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Speaker 4: market you know, on the undas perspective, we started from

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Speaker 4: the passive. In the recent year, we also try to

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Speaker 4: rebalance in between passive and active and also we started

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Speaker 4: the eating business. In terms of the a un growth

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Speaker 4: from the fixing cop back to twenty seventeen, so to date,

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Speaker 4: Taiwan is the largest bung ETF in terms of the

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Speaker 4: aun in Asia. We have been experiencing very tremendous an

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Speaker 4: growth in the last two years after the US FED

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Speaker 4: funds hike, so we see we'll have a very big

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Speaker 4: exposure and the phenomenons a n growth for the US

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Speaker 4: treasury market.

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Speaker 2: Julian, I want to get your thoughts on the Taiwan

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Speaker 2: equity market specifically, do you think the bull market can

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Speaker 2: continue in Taiwan.

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Speaker 4: We actually very culturally optimistic because we are almost the

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Speaker 4: history high, which means we still have a very certain

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Speaker 4: percentage regarding the downside risk, especially after the August market corrections.

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Speaker 4: People actually have more custures and the more actually this

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Speaker 4: kind of the risk advertised towards the potential market adjustment.

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Speaker 4: So I think the nine still young. But however, the investor,

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Speaker 4: especially for Taiwan's mom and power investor, they have a

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Speaker 4: very good investment behalf we ca bi black sale red

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Speaker 4: by low sale high, so they are quite reluctant to

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Speaker 4: trace the market high, but they are morely happy to

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Speaker 4: accumulate the share during the weakness. So yes, we are

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Speaker 4: very bullished towards the industry outlook. Regarding the AI and

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Speaker 4: the semiconductor. But however, if this is an opportunity means

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Speaker 4: this is a terms of the challenge at hand. So

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Speaker 4: we'll still have this kind of the strategy to educate

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Speaker 4: investor to balance in between the equity and the fixed income,

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Speaker 4: to balance the local international, to balance from the single

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Speaker 4: investment versus regular saving plan. So we are trying to

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Speaker 4: share in. Then a lot of the AI application regarding

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Speaker 4: the robody advisory is heavily applied by using the ETF.

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Speaker 4: So we see a lot of the investors quite joining

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Speaker 4: this kind of AI booming and also writing on the

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Speaker 4: potential upside of the tile equitement market.

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Speaker 3: An interesting fact about Julian is that he's a very

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Speaker 3: good singer, not just in Chinese but in English, and

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Speaker 3: he knows what the latest hits are. He's also considered

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Speaker 3: the godfather off in Taiwan, as he launched the first

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Speaker 3: ETF in two thousand and three. So Julian, can you

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Speaker 3: tell us about the Taiwan's ETF market, Why has it

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Speaker 3: grown so much and why is it third in Asia

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Speaker 3: Pacific after Japan and mainland China.

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Speaker 4: It's about the chicken and the egg. So this is

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Speaker 4: a no free launch, so it's been a while. We

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Speaker 4: continuously to educate and the interact with the juneral pop Puenta. Basically,

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Speaker 4: we have been publishing the ETA books more than seventy

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Speaker 4: seven zero in the last twenty one years. For many years,

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Speaker 4: we'll conduct more than one thousand seminar around the island.

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Speaker 4: So it's pretty much like the fruit prints and the

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Speaker 4: presence for Taiwan. We're trying to have a discand of

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Speaker 4: the touch base with every individual regarding the ETM investment.

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Speaker 4: In the last twenty one years, we have been like

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Speaker 4: one times one one equity one beta to four times four.

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Speaker 4: We have a four different asset clauses regarding the equity,

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Speaker 4: fixed income, currency and commodity, so we have a one beta,

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Speaker 4: two beta, negative one beta and the small beta. Taiwan

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Speaker 4: has a very holistic and comprehensive product spectrum, and we

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Speaker 4: also see a lot of participants from like a two

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Speaker 4: or three ETA player. To date, we have a seventeen

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Speaker 4: fifteen local, two from International, one from Singapore, another one

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Speaker 4: from Japan mentioned once we have actively managed ETF. In

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Speaker 4: the second half or the first half of next year,

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Speaker 4: we see a lot of Europe and the US big

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Speaker 4: giant is coming to join the actively ETF battlefield, so

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Speaker 4: you may see the participation will morning like a twenty

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Speaker 4: all of the thirty eight local domasile mutual fund company,

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Speaker 4: so you will see a lot of this kind of

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Speaker 4: the new player a new blog to join the Taiwan

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Speaker 4: etr market. I think Taiwan have a very good beneficial

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Speaker 4: participations and the very good regulatory framework. And also we

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Speaker 4: see more of the more international ETF player.

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Speaker 3: So you mentioned active ETFs and how that's going to

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Speaker 3: come as early as potentially next year or maybe end

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Speaker 3: of this year. Active ETFs have seen tremendous growth around

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Speaker 3: the globe. We've seen more than one trillion dollars in

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Speaker 3: active ETFs. Who do you think are some of the

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Speaker 3: new players and what can we expect from Taiwan's active

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Speaker 3: ETF market.

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Speaker 4: As I just mentioned earlier, now the market is heavily

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Speaker 4: dominated by two essay classes. One is a Taiwan local equity,

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Speaker 4: another is a US treasury, but those two products quite mature,

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Speaker 4: so they are trying to enter the ETF market from

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Speaker 4: the two point zero the generation too, so they see

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Speaker 4: the actively managed ETF in the worldwide from the US,

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Speaker 4: South Korea, Hong Kong, etc. They have been a different

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Speaker 4: style in terms of the conversions, in terms of the

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Speaker 4: money market funds, in terms of the CD, in terms

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Speaker 4: of the bond. I think this is for those international

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Speaker 4: giants they may not just treat Taiwan as the redistribution

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Speaker 4: channel basis. They will recruit more and more talent and

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Speaker 4: the techniques and the money to not just drink the

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Speaker 4: milk here in Taiwan. They are readied to raise a

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Speaker 4: cow actively et as a cow and ultimately probably maintain

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Speaker 4: the form. So we are more happy to see more

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Speaker 4: in the more is kind of participation in from the worldwide.

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Speaker 4: But also people may ignore they basically have another product

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Speaker 4: we call multi assets. ETF is also open this time,

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Speaker 4: but people quite focus on the actively managed ETF because

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Speaker 4: it's a non index tracking at this moment, but it's

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Speaker 4: a food transparent. So you see Europe and US probably

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Speaker 4: in the second half they are ready in terms of

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Speaker 4: the infrastructure and the ecosystem and launch their IPO probably

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Speaker 4: the first quarter as soon as possible. Bloomberg magazine last

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Speaker 4: week have an article to talking about the AI booming

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Speaker 4: to talking about a lot of the international player including

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Speaker 4: JP Morgan, allions and the MURA they are ready to

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Speaker 4: come into Taiwan for actively managed ETF. But now multi

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Speaker 4: asset is pretty much like multi vitamin, so you don't

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Speaker 4: need to take like a vitamin A vitamin B separately,

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Speaker 4: you just take one. So multi asset can combine the

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Speaker 4: equity and the income into one underlying index.

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Speaker 2: And the ETF is the investor based in Taiwan ready

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Speaker 2: for multi accest strategies and also separately active strategies.

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Speaker 4: Yeah, this is a very good question because as I

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Speaker 4: just mentioned earlier, chicken and the egg, So we are

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Speaker 4: just thinking about the products. And then if you have

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Speaker 4: a product, you have to look for the clients. But

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Speaker 4: if you have a client on hand, and then you

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Speaker 4: just you know, launch the product to fulfill their needs.

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Speaker 4: So I think this is another agenda for Taiwan's new

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Speaker 4: ETA player or existing ETIA player. Where are those appropriates

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Speaker 4: a suitable actively or a multis et a buyer. So

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Speaker 4: I think they're going to be another learning cuff. We

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Speaker 4: have to educate and to protect those potential participants to

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Speaker 4: know more about this kind of product.

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Speaker 1: This podcast is brought to you by HK ex Asia's

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Speaker 2: The market is a very large market in Taiwan. I

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Speaker 2: think not a lot of people realize how deep and

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Speaker 2: how large asset managers are actually sitting on in Taiwan.

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Speaker 2: To your point earlier on, so I'm wondering with new

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Speaker 2: products and strategies coming in, whether that's multi asset or

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Speaker 2: purely equity active strategies for example, and you mentioned earlier

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Speaker 2: on there are some very mature products in the market,

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Speaker 2: equity and fixed income. Where will the additional money come from?

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Speaker 2: In other words, do you see money flowing out of

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Speaker 2: mature products or do you see is there a lot

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Speaker 2: of dry powders sitting somewhere else inside or outside Taiwan

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Speaker 2: that you think will go into a lot of these

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Speaker 2: new products coming in.

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Speaker 4: A yeah, This is also another very good question because

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Speaker 4: we are not encouraged to do the zeo sung game,

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Speaker 4: you know, because the zeosung game in the traditional mutual

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Speaker 4: business is very easily to be witneys. During the ipo zeason,

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Speaker 4: you do ipo, you got money, and the other do

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Speaker 4: ipo you lose money. So it's basically pretty much like

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Speaker 4: a Zeosung game. But for Taimewan etr market we see

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Speaker 4: this is a lot of cross industry and the synergy

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Speaker 4: in between the mutual fund security banking in terms of

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Speaker 4: wealth management and the live insurance industry. So for example,

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Speaker 4: in the recent year more and the more investment link

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Speaker 4: insurance policy, they are more happy to use the ETF

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Speaker 4: as a component to construct their portfolio. And this is

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Speaker 4: very low cost and also can feedback very decent coupon

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Speaker 4: or the dividend in this case. And we see also

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Speaker 4: a lot of wealth management for those we could safer

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Speaker 4: or the depositor. They are also recognized the how efficiency

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Speaker 4: and how attractive for the ETF. So we didn't see

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Speaker 4: a lot of Zeosung gain adherents among in the very

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Speaker 4: traditional mutual fund industry, we see a lot of this

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Speaker 4: kind of harmonized consolidation in between domestic international or the

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Speaker 4: active and the passive. We see a lot of the

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Speaker 4: traditional active manager they become the c funds or become

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Speaker 4: a very big participant towards our ETF. So it's not

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Speaker 4: zeus on game. It's pretty much like a co competition.

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Speaker 4: So Taiwan, we see a lot of deposits life insurance holder.

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Speaker 4: They also cross the industry to join the ETF market.

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Speaker 3: So if we talk about the different types of investors

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Speaker 3: you have in Taiwan, you have a very high retail

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Speaker 3: adoption with close to eight million users who are familiar

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Speaker 3: with ETFs. You mentioned institutional clients, you mentioned pension funds

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Speaker 3: that are allocating to ETFs. In terms of flows, we've

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Speaker 3: seen forty two billion US dollars in assets under management

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Speaker 3: go into Taiwan ETFs. But what some people may not

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Speaker 3: realize is that within the Taiwan Stock Exchange Weighted Index

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Speaker 3: TSMC accounts for thirty six percent of the index. The

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Speaker 3: next holding is then onn HI at three point five percent.

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Speaker 3: And so are you worried about concentration risk? Especially in Taiwan.

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Speaker 3: There's a lot of high diffidend products that have gathered

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Speaker 3: a lot of assets, including yours, which was the largest

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Speaker 3: ETF launch globally. He has launched a high dividend ETF

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Speaker 3: in Taiwan. A lot of these high dividend products have

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Speaker 3: very good deal paying ten to fifteen percent on a

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Speaker 3: monthly basis. And so in terms of flows, what are

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Speaker 3: investors allocating to Are you worried about concentration risk and

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Speaker 3: what should investors know?

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Speaker 4: TSMC basically is a heavy problem, so we special thanks

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Speaker 4: to the TSMC's contribution to Taiwan's economy and the financial market.

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Speaker 4: But as you're concerned and the mentioned regarding the concentrations,

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Speaker 4: TSMC is pretty much like the other country for example,

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Speaker 4: like a sim zone towards the cost B or the

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Speaker 4: other Nvidia of the top three top five towards the

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Speaker 4: US market. So yes, we are trying to diversify search

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Speaker 4: concentration ratio through the different product style. For example Taiwan,

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Speaker 4: if you're using the cap weighted ETF like our Taiwan

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Speaker 4: top fifty is a forty percent went to the TSMC,

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Speaker 4: So it's very highly correlated. So once the TMC went up,

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Speaker 4: the ETA went up, but not to mention once the TSMC,

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Speaker 4: you know, TOMPO, the ETF also have a very significant

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Speaker 4: downs at risk. But this is why the nature of

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Speaker 4: the cap weighted so you have to highly correlatet it

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Speaker 4: with the market performance. But however, as you just mentioned,

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Speaker 4: TSMC is not so called high dividend stock. TSMC paid

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Speaker 4: up dividend quarterly very juicy, but the since the share

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Speaker 4: prices is very high, so the dividend year is quite

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Speaker 4: long lately, the popular high dividend etr products basically they

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Speaker 4: are all known TSMC holdings in this case, so it's

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Speaker 4: so become another diversifyed occasion. If you buy core holding

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Speaker 4: went to the cab waiting, set Lights went to the

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Speaker 4: high dividend, or in the verse co holding, you go

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Speaker 4: to buy the high dividend for those Patroon find investors,

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Speaker 4: but the set Lights you can go to the cap

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Speaker 4: weighting like a very focused on the TSMC. So in

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Speaker 4: this case, Taiwanese invested they know how to diversify through

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Speaker 4: search of profolio construction regarding the corn the setlights. So

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Speaker 4: this is a happy problem, but at least we happy.

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Speaker 2: Right TSMC is a happy problem to have while the

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Speaker 2: stock is doing well. And I'm wondering if in fact,

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Speaker 2: at some point TSMC, you know, we start to see

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Speaker 2: the market stake profits as well. Do you think there

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Speaker 2: are enough solutions to your point, enough solutions in the

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Speaker 2: market to be able to offset you know, what could

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Speaker 2: potentially be a deep bear market in Taiwan because the

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Speaker 2: TSMC stock is not doing well definitely.

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Speaker 4: You know during August, this is a you know the

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Speaker 4: history for this kind of kid jopped that there's three

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Speaker 4: times it's already took place in August and the September

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Speaker 4: for Taiwan equity market. Early of August, we see this

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Speaker 4: as due to the Japan decay in terms of the

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Speaker 4: curry trade. But you see during the market tumpling, we

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Speaker 4: have infirs ETF to hage the downside risk nice. So

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Speaker 4: during the market hot, people forget about the TSMC, people

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Speaker 4: will forget about the capt weighty ETF. So a lot

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Speaker 4: of Taiwanese investors including institutional investor or the corporate investor

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Speaker 4: or the foreign financial investor, they're coming to buy the

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Speaker 4: infras ETF. For the recently the market temple our infans

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Speaker 4: CTF in terms of the trading turnover and the trading

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Speaker 4: volume also hit another history height. It's very remarkable and

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Speaker 4: the significant so people may not just buying a hod

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Speaker 4: or buying a whole and received dividends. People know how

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Speaker 4: to you know, changes in twin trading oriented and allocation orientated.

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Speaker 4: So people before are tracing the ETF and they become

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Speaker 4: buying whole and receive diviidend. But after the August market

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Speaker 4: TOMORROIW people get used to using the schedule INFRASTF during

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Speaker 4: the market correction. And also this is another two times

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Speaker 4: leverage ETF for Taiwan top fifty. Also we see a

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Speaker 4: lot of the creation during the primary market from the

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Speaker 4: international counterparty because during the market correct and for those

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Speaker 4: empty hands, they are baiting the rebound opportunity, so they

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Speaker 4: are not going to buy the one beta, They're going

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Speaker 4: to buy two beta. So we have a very holistic

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Speaker 4: I just mentioned four times four people. You really love TSMC,

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Speaker 4: you want to get the married and then you buy

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Speaker 4: an hole in the TSMC. When a're down, you just

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Speaker 4: stick with TSMC. But a lot of investors they know

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Speaker 4: how to adjust their perform through the two beta one

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Speaker 4: beta and the NTI one beta, not just the setlight

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Speaker 4: just mentioned the core and the set line strategy. They

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Speaker 4: know how to use the vertico not just COMINENTO in

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Speaker 4: between the different essay classes. They know how to adjust

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Speaker 4: this strategy in between the different beta from the two

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Speaker 4: beta small beta and the one beta Nicotie one beta.

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Speaker 2: Yeah, so there was a blessing that came out of

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Speaker 2: the market turmoil. I remember that August five, that Monday. Well,

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Speaker 2: you learn something new every day to our listeners. If

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Speaker 2: you're listening to Tiger Money, of course, if you like

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Speaker 2: what you hear, don't forget to subscribe to like and

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Speaker 2: to share, Julian, we'll not move from some of the

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Speaker 2: stereos stuff to some of the lighter things as well.

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Speaker 2: We mentioned you're a good singer. Let's put it that

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Speaker 2: way first, before I ask you what your favorite song is,

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Speaker 2: do you admit that you're a good singer or do.

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Speaker 3: You want to sing for us?

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Speaker 5: No way, no way, time if you come into one.

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Speaker 5: I were trying to interact with you through the certain

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Speaker 5: relieve over alcohol and then we will have a memory

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Speaker 5: enhancement program and after AP and IPN so during the.

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Speaker 2: Day memory enhancement program.

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Speaker 4: I'm the very serious man, So I don't talking about

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Speaker 4: this kind of the KdV psalms. Yeah, I may show

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Speaker 4: you how good I am to singing the psalms.

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Speaker 2: Okay, Well, this is just as an aside. I actually

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Speaker 2: learned some of my Mandarin because of A and I'm

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Speaker 2: gonna give away my age if I say this. It

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Speaker 2: was one specific Taiwanese TV series back in the early

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Speaker 2: two thousands. It basically involved four guys and a girl

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Speaker 2: and it had something to do with yeah Lioshayan and

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Speaker 2: a lot of the songs there. That's how I learned

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Speaker 2: my Mandarin Chin feyde juebun no shuccini right and all

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Speaker 2: those things. So I think those are some of the

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Speaker 2: potential songs we can we can hit uh if Rebecca

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Speaker 2: and I can't come visit you as well. Rebecca, I

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Speaker 2: think you've another question to you.

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Speaker 3: So you are the ETF advisor to the burst of Malaysia,

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Speaker 3: k Tim Thailand, k I be Malaysia. You're an avid traveler.

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Speaker 3: What's your favorite city outside Taiwan and why?

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Speaker 4: This is very tough questions. I love old cities. Yeah,

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Speaker 4: I love all my friends, so yeah, they have a

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Speaker 4: different specialties for those cities k L Bangkok, Hong Kong,

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Speaker 4: Singapore's soul or Tokyo. Yeah, every time I craa enjoy

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Speaker 4: to have a such unique party with our business partner,

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Speaker 4: old friends.

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Speaker 3: Okay, as the godfather of ETFs, what's your favorite ETF?

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Speaker 3: That's not you and Da.

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Speaker 4: No, none, only even you question you guys, Christian is

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Speaker 4: very tricky. Which ct I love the most? Yeah? If

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Speaker 4: I say Bangkok, So next time I went to KL,

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Speaker 4: my ka ol friend will say, hey, Julian, you have

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Speaker 4: a panel. You had to dream more whiskey because you

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Speaker 4: don't love KL. So yeah, which product I like? No?

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Speaker 4: I just only love Okay.

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Speaker 2: I like how the answers are properly headed, almost like

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Speaker 2: your product offering in any market condition, any market direction,

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Speaker 2: there is a product. And if you want to up

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Speaker 2: your leverage, you can go one or two or three

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Speaker 2: beta for that option. There are options for every other

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Speaker 2: scenario that seems to be the flavor of how Julian

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Speaker 2: is answering Rebecca's tricky questions.

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Speaker 3: Rebecca, come on well, Julian, thank you so much for

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Speaker 3: your time today. We appreciate having you on Tiger Money

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Speaker 3: and we look forward to continuing this conversation next time.

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Speaker 3: Thank you so much. Julian Leo, chairman of Yuanta Securities

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Speaker 3: Investment Trust.

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Speaker 2: Thank you and thank you for listening to Tiger Money

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Speaker 2: or Boomberg podcast about investing fund and financial markets in

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Speaker 2: Asia and beyond. If you like what you hear, do

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00:22:03,320 --> 00:22:06,479
Speaker 2: not forget to subscribe to like to share, and so

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00:22:06,560 --> 00:22:09,160
Speaker 2: also leave us a review. We'd love to hear from

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Speaker 2: you until next time. You can find us inside the

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Speaker 2: Bloomberg terminal or on LinkedIn. This podcast was produced by

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Speaker 2: Clara Chan