Taiwan Fund

Taiwan Fund

The Taiwan Fund launched in December 1986 as a New York Stock Exchange-listed closed-end vehicle, created to give foreign investors access to Taiwan's equity market before the proliferation of ETFs. Nomura Asset Management U.S.A. currently acts as the fund's investment adviser, with day-to-day portfolio decisions run by Lead Portfolio Manager Anthony Ho. The fund's mandate is concentrated: it can invest up to 100% of its assets in Taiwanese-listed equities, a structure historically unusual among US-regulated funds. Strategy tilts toward fundamental, bottom-up stock selection across the full capitalization spectrum. While benchmarks skew heavily toward Taiwan Semiconductor Manufacturing Company (TSMC), the fund actively positions in mid-cap technology, financials, and industrial names that are underrepresented in passive products. Confirmed top-ten holdings include TSMC, Hon Hai Precision Industry (Foxconn), MediaTek, and Delta Electronics. The fund also holds exposure to Taiwan's financial sector through names like CTBC Financial Holding and E.Sun Financial Holding, and carries a modest allocation to consumer-oriented equities such as Nien Made Enterprise. It distributes income annually through a managed distribution policy. The fund's scale sits at roughly $315 million in net assets as of mid-2025. It is advised by Nomura, which brings Asia-Pacific research and trading infrastructure, while the board of directors provides US-listed fund governance. In August 2024, the fund announced a renewal of its share repurchase program, authorizing the buyback of up to 10% of outstanding shares, a sign of continued discount management efforts. Its structural differentiator is straightforward and durable: the Taiwan Fund remains one of the last dedicated, single-country closed-end equity funds on the NYSE. Since closed-end funds trade at market-determined prices — often at premiums or discounts to net asset value — the vehicle itself embeds a distinct risk-return layer. Investors betting on the fund are simultaneously taking a view on Taiwanese equities and on the discount narrowing, a complexity that passive ETFs strip away. In 2025, the board approved the continuation of the managed distribution plan, setting the quarterly rate at $0.48 per share, reinforcing the income component amid equity volatility.