8th Investment Summit 2023 - Taiwan | The Asset | TBA, Taipei

With electric vehicles and biotechnology set to dominate opportunities in the coming years, along with emerging metaverse-related possibilities, demand for the semiconductors is likely to remain a mainstay of its exports for the foreseeable future.

That is not to say the outlook isn’t clouded by darkening storm clouds. Tension between Taiwan and China are at historic highs. Meanwhile, nearshoring of chip manufacturing is forcing Taiwan’s greatest and best technology companies to set up camp in the US, Japan and Europe. Adding to that is the sputtering engine of global growth as 2023 is likely to see recession in developed markets.

Much like the rest of emerging Asia, foreign investors have been net sellers of Taiwan equities. Still, investors in Taiwan remain attracted to exchange-traded funds (ETFs) as the preferred investment vehicle. Investors increasingly are using ETFs as part of their portfolio construction to generate outperformance.

ETF’s prevalence comes as going green remains a big theme for 2023. Taiwan has announced plans to generate 20% of its energy needs from renewable sources by 2025, with offshore wind and solar as key components. Sustainable investing is on the rise and regulation is playing a critical supporting role by enhancing disclosure requirements for environmental, social and governance (ESG)-themed funds.

Despite the strong appetite for sustainable investment, however, investors are still faced with several challenges such as greenwashing amid the lack of standardized data.