Taiwan’s Fubon to debut first corporate governance ETF

21 April 2017   Category: News, Asia, Global, Taiwan   By Asia Asset Management

Taiwan’s Fubon Securities Investment Trust Co (Fubon SITC) is set to launch the island state’s first exchange traded fund (ETF) tracking corporate governance, offering investors access to local companies with good corporate practices. 

Fubon SITC said in a statement on Wednesday (April 19) that the new fund – Fubon TWSE Corporate Governance 100 ETF (CG 100 ETF) – aims to raise at least NT$200 million (US$6.57 million). The fundraising will be carried out on April 21.

The ETF is scheduled to be listed on the Taiwan Stock Exchange in May; the date has not been finalised yet. 

The fund will track the TWSE Corporate Governance 100 Index (CG 100 Index), which was designed to track 100 locally-listed companies that meet liquidity criteria and score in the top percentile on the corporate governance evaluation system. It includes China Airlines, the city state’s largest airline, and commercial lender Taichung Bank.

The index was launched by the stock exchange in July 2015, and licensed to Fubon SITC a year later.

Wen Fang-yi, portfolio manager of Fubon SITC, tells Asia Asset Management that the return on equity of the CG 100 Index has outperformed the benchmark Taiwan Stock Exchange Weighted Index over the past few years, reflecting the strong profit earning capability of its constituent companies.

Ms. Wen says sustainable investing, including corporate governance, has plenty of room for growth in Taiwan as local funds which focus on this theme account for a very small portion of the market.

There were 66 international and domestic ETFs listed in Taiwan with NT$284.8 billion in total AUM as of March 2017, according to data from the Securities Investment Trust and Consulting Association.