New York, October 19 /PRNewswire/ — Fly On Wall Street News Commentary reported that Taiwan’s benchmark stock index has risen 62% this year, making it one of the best-performing major global indices. According to Bloomberg on October 16, some professional fund managers and analysts in Taiwan are resigning to invest their own money, as strict regulations prevent them from trading the very stocks they select for clients. With approximately one-tenth of Taiwan’s index stocks more than doubling in value this year, some believe this trade-off is no longer worth it.
The companies and funds mentioned in this article include: Taiwan Semiconductor Manufacturing Company Limited (TSMC, NYSE: TSM), ASE Technology Holding Co., Ltd. (ASE, NYSE: ASX), United Microelectronics Corporation (UMC, NYSE: UMC), iShares MSCI Taiwan ETF (NYSE Arca: EWT), and The Taiwan Fund, Inc. (NYSE: TWN).
Watching the market from behind the changing room
Taiwan has not fully banned individual investing, but its asset management industry code of conduct prohibits employees from trading any locally listed stock or related derivatives within seven trading days before or after their firm buys or sells that stock or derivative—effectively eliminating personal stock selection in practice. Fund managers must also lock away their phones, laptops, and smartwatches every morning until the market closes at 1:30 p.m. According to a July report by Taiwan’s United Daily News, this phone restriction was formalized in 2024 to curb insider trading; previously, six former fund managers from four companies were prosecuted for front-running trades through accounts belonging to friends and family.
Ken Tsai, a 40-year-old fund manager, told Bloomberg that he was still employed at a major Taiwanese asset management firm until July, though Bloomberg did not disclose the company’s name. He said he selected a Taiwanese manufacturer of AI server data transmission components as the fund’s largest holding in 2024, but he personally owns none of its shares. “This gives me a strong sense of relative deprivation,” he said. He now works at a private investment firm in Taipei, which was also not disclosed. Compensation is also an attraction: Bloomberg cited data from headhunters and recruitment firms indicating that portfolio managers in Taiwan earn annual salaries ranging from approximately $124,000 to $311,000, below the base salary levels in Hong Kong.
The private institutions they joined are not subject to these regulations. These institutions are registered with the Ministry of Economic Affairs as private companies and, since they do not raise public funds, are not required to apply for an asset management license from the Financial Supervisory Commission. Brokers told Bloomberg that some of these institutions now have monthly trading volumes exceeding NT$10 billion, comparable to those of mid-sized asset management firms.
The bull market behind the wave of resignations
This rally has been largely driven by the AI hardware supply chain. TSMC reported third-quarter revenue of NT$1.49 trillion ($46.7 billion), a 50.9% year-over-year increase; net profit rose 68.7%, with a gross margin of 66.4%. The company provided a fourth-quarter revenue guidance of $52.3 billion to $54.3 billion.
The chip packaging and testing business also benefited from the same market trend. ASE Technology Holding reported a consolidated revenue of NT$88.1 billion for September, a 45.5% year-over-year increase; third-quarter revenue reached NT$244.2 billion, up 44.8% year-over-year.
United Microelectronics Corporation, a mature process foundry, reported an 30.71% year-over-year increase in August sales, driving a 14.66% growth in year-to-date sales. In its second-quarter report, the company forecasted third-quarter capacity utilization to exceed 90% and noted that revenue from its 22/28-nanometer business continued to reach new highs.
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More like personnel turnover than a mass exodus
Data suggests this is more about personnel movement than a mass exodus. According to fund data website MoneyDJ, fewer than half of Taiwan’s 20 largest local equity mutual funds have retained the same portfolio manager over the past three years. Bloomberg also reported that applications for entry-level positions at some international firms this year have roughly halved. However, the Financial Supervisory Commission noted that the number of registered industry professionals has actually increased from 4,581 at the end of 2025 to 4,729 in September. Companies are also responding: Taiwan’s largest foreign asset management firm is offering cross-market analyst roles and office rotations to retain staff.
Regulators are also paying attention. On October 15, the financial regulator stated that it is gathering information and plans to review relevant rules to strike a balance between market development, conflicts of interest, and investor protection. A senior asset management executive told Bloomberg that there is currently no simple solution.
Case studies of professional institutions
At least one professionally managed fund outperformed the market. The Taiwan Fund, a closed-end fund listed on the New York Stock Exchange, reported a total return of 47.36% for the fiscal quarter ended May 31, compared to 26.12% for the Taiwan Weighted Total Return Index during the same period; its net asset value per share at the end of the quarter was $116.90.
Investors who prefer to hold the overall market can choose the iShares MSCI Taiwan ETF, which manages approximately $11.9 billion in assets.
Last week served as a reminder of how quickly market dynamics can shift. According to Trading Economics, the Taiwan Weighted Index fell 4.6%, marking its first weekly decline in five weeks, as tech stock selling spread and TSMC CEO C.C. Wei warned of macroeconomic uncertainty and weak consumer demand. In New York, according to Stock Analysis data, as of October 16, TSMC’s stock price dropped 8.98% to $412.61 from its October 9 closing price; UMC fell 14.86% to $39.53; UMC declined 13.68% to $19.82; the iShares fund dropped 7.04% to $106.26; and The Taiwan Fund fell 8.78% to $94.18. For managers who recently shifted their salaries into self-managed accounts, these fluctuations now directly impact them.
The Taiwan Index fell 4.6% this week. To understand the chart analysis behind this movement, get your free copy of the "Stock Preachers" guide and "The Roadmap" market report at stockpreachers.com.
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This is an independent news commentary. Fly On Wall Street is wholly owned and operated by Market Equities Limited (“MEL”), a company incorporated under Irish law. MEL has not received compensation from any fund sponsor or company mentioned in this article. MEL and its owners, operators, directors, and affiliates currently do not hold any shares in the funds or companies mentioned herein, but reserve the right to buy or sell such shares at any time without prior notice. Weekly price changes for U.S.-listed stocks are based on Stock Analysis data from the close of October 9, 2026, to the close of October 16, 2026, and exclude distribution income. Information is sourced from company and fund announcements, regulatory filings, published reports, and third-party data deemed reliable, but its accuracy is not guaranteed. Investing in securities involves risks, including the potential loss of all or part of your investment. This article is governed by Irish law.