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iShares MSCI Taiwan ETF

EWT:NYSE

equity ETF | passive | iShares | Tracks MSCI

Market Price

US$69.94 (26 Jan 2026)

+30.86% (YoY)

NAV

US$69.13

+1.17% Premium

Yield

4.31%

+25.45% (YoY)

Expense Ratio

0.59%

-10% vs Avg: 0.66%

Box Set (ETF)

⚡ Executive Summary

📊 The Bottom Line

This ETF provides exposure to the large and mid-capitalization segments of the equity market in Taiwan, a global leader in the technology sector, particularly semiconductors. With its deep liquidity and competitive expense ratio, EWT offers an efficient vehicle for targeted Taiwan equity exposure. Bull case scenarios project NAV reaching US$83.00, representing a potential 20% upside, while bear case risks could see NAV decline to US$55.00, a 20% downside.

⚖️ Risk vs Reward

The underlying Taiwan equity market currently trades at an aggregate P/E of 20.99x, which is somewhat elevated compared to historical averages but reflects the strong earnings growth in the dominant technology sector. This premium valuation is partially justified by Taiwan's critical role in global technology supply chains, especially in AI-driven semiconductors. However, this concentration also introduces significant sector-specific risk. Upside potential for the ETF's holdings is tied to continued global demand for advanced technology, while geopolitical tensions and cyclical downturns in the semiconductor industry represent key downside risks. Compared to broader emerging markets, Taiwan's tech-heavy composition offers higher growth potential but also higher volatility. The ETF's tight tracking and low premium to NAV mitigate some operational risks.

🚀 Why EWT Could Soar

• Sustained global demand for advanced semiconductors (60%+ of index), particularly from AI and data center expansion, could drive 15-20% earnings growth for top holdings.
• Taiwan’s successful management of geopolitical risks and strong export performance could attract further foreign capital inflows, supporting valuation multiples by 10-15%.
• Economic recovery in key global markets could boost consumer electronics demand, benefiting Taiwanese tech manufacturers and potentially leading to 10% revenue upside.

⚠️ What Could Go Wrong

• A prolonged downturn in the global semiconductor cycle or oversupply could lead to a 20-25% decline in earnings for major holdings, impacting NAV.
• Escalating geopolitical tensions in the Taiwan Strait could trigger significant market instability and a sharp re-rating of Taiwanese assets, causing a 25-30% market correction.
• Increased competition from other regional tech hubs or a slowdown in key export markets could erode profit margins and growth prospects for the ETF's constituents.

🏢 Fund Overview

What Are You Actually Buying

The Taiwan equity market is a highly specialized segment within international equities, predominantly composed of large and mid-capitalization companies primarily engaged in the technology sector, particularly semiconductor manufacturing and related industries.
Taiwanese companies, such as Taiwan Semiconductor Manufacturing Company (TSMC), are global leaders in advanced technology, playing a crucial role in the international supply chain for integrated circuits and electronic components.
The market's performance is heavily influenced by global technology cycles, export demand, and, to a lesser extent, domestic economic conditions. It is characterized by high innovation and competitiveness.
Investing in Taiwan equities offers targeted exposure to the global technology sector's growth drivers and serves as a strategic component for portfolios seeking diversification beyond developed markets, albeit with higher concentration risk.

Market Dynamics & Outlook

The Taiwan equity market, heavily weighted towards information technology (around 67% of the ETF's assets), is currently benefiting from robust global demand for semiconductors driven by advancements in artificial intelligence (AI), high-performance computing, and 5G technology.
Geopolitical considerations remain a significant factor, with ongoing cross-strait relations influencing investor sentiment, though the market has shown resilience.
Despite a global economic slowdown, Taiwan's exports, especially in electronics, are expected to remain a strong growth driver, although some deceleration in 2026 is possible.
Valuations are somewhat elevated, reflecting strong earnings expectations in the tech sector, making the market susceptible to shifts in global technology cycles or geopolitical events.

🎯 Why This Matters

Understanding the Taiwan equity market’s deep integration into the global technology supply chain is paramount for investors. Its high concentration in semiconductors means performance is largely dictated by global tech demand and innovation cycles, while geopolitical stability remains a crucial, overarching risk factor for asset valuations.

📈 Valuation & Analysis

Historical Performance

YTD

+6.20%

+30.86%

Yearly Growth (3Y)

+24.46%

Yearly Growth (5Y)

+12.01%

Yearly Growth (10Y)

+15.20%

Yearly Growth (Since Inception)

+5.49%

Current Valuation

The iShares MSCI Taiwan ETF's underlying holdings currently trade at an aggregate price-to-earnings (P/E) ratio of 20.99x and a price-to-book (P/B) ratio of 2.68x, as reported in the latest fact sheet. This P/E ratio is slightly above the broader MSCI Taiwan Index P/E of 17.36x, as per Morningstar data. The ETF offers a trailing dividend yield of 4.03%. Current valuations reflect the strong growth prospects of Taiwan's dominant technology sector, especially its semiconductor industry, which commands premium multiples globally. Historically, the P/E for Taiwan equities has fluctuated, and the current level suggests that the market is pricing in continued robust earnings, aligning with a 'fairly valued' assessment rather than deep undervaluation or extreme overvaluation in the context of its growth profile.

The Bull Case - Upside to

Strong Global Semiconductor Demand

High Probability

Continued robust demand for AI chips and high-performance computing could drive TSMC's revenue growth by 20% in 2026, boosting EWT's NAV by approximately 5-7%.

Innovation and Market Leadership

Medium Probability

Taiwanese tech companies' sustained innovation in advanced manufacturing processes could solidify their competitive edge, leading to market share gains and a 10% premium on valuations for EWT's holdings.

Favorable Geopolitical Stability

Low Probability

A period of continued geopolitical stability and de-escalation of cross-strait tensions could reduce the 'Taiwan discount,' leading to a 5-10% upward re-rating of the overall market multiples.

The Bear Case - Downside to

Global Semiconductor Downturn

Medium Probability

A cyclical slowdown or oversupply in the semiconductor industry could lead to a 15-20% contraction in corporate earnings for major EWT holdings, translating to a 4-6% decline in the ETF's NAV.

Escalation of Geopolitical Tensions

Medium Probability

Any significant escalation of geopolitical tensions in the Taiwan Strait could trigger a sharp sell-off in Taiwanese equities, potentially causing a 20-25% drop in the ETF's market price due to increased risk premium.

Increased Competition and Supply Chain Diversification

Low Probability

Efforts by global companies to diversify supply chains away from Taiwan, or increased competition from emerging chip manufacturers, could erode market share and long-term growth for EWT's constituents, leading to a 5-10% valuation haircut.

Risk/Reward Assessment

The risk-reward profile for the iShares MSCI Taiwan ETF appears balanced, with notable upside potential driven by Taiwan's leadership in the critical global semiconductor industry. The strong secular demand for AI and high-performance computing is a significant tailwind for the ETF's heavily weighted technology holdings, justifying current valuations. Investors stand to benefit if these growth trends persist and are effectively monetized by the underlying companies. However, the ETF is highly concentrated in the technology sector and inherently exposed to geopolitical risks, which, though currently managed, remain a latent threat. A downturn in the semiconductor cycle or an unexpected geopolitical event could swiftly erode gains. Therefore, while the fundamental growth drivers are compelling, the specific risks associated with sector concentration and regional politics necessitate a cautious approach. The ETF is suitable for investors seeking targeted technology exposure within emerging markets, who are also comfortable with the inherent volatility and event-driven risks.

Peer Comparison

EWT stands out among Taiwan equity ETFs due to its substantial assets under management, making it the most liquid and actively traded option for gaining exposure to the Taiwan equity market. Its relatively competitive expense ratio for a single-country ETF also positions it favorably against more expensive alternatives. While EWT provides broad market coverage of large and mid-cap Taiwanese equities, investors should note its significant concentration in the Information Technology sector, a characteristic shared with its closest peer, FLTW. FLTW offers a lower expense ratio, which can be attractive for long-term investors, but has considerably less AUM and daily trading volume, potentially impacting liquidity.

Fund	Expense Ratio	AUM (B)	1Y Return	3Y Return	5Y Return	Yield
iShares MSCI Taiwan ETF (EWT) ⭐	0.59%	US$7.0B	30.86%	24.46%	12.01%	0.04%
Franklin FTSE Taiwan ETF (FLTW)	0.19%	US$0.6B	31.91%	26.16%	13.48%	0.03%

🎯 Why This Matters

The detailed valuation and peer comparison reveal that while EWT provides access to a high-growth market, its sector concentration and specific regional risks demand careful consideration. Investors should weigh the compelling growth narrative of Taiwan's tech giants against the potential for volatility and geopolitical events when sizing their allocation to this ETF.

📊 Appendix

Top 10 Holdings (80+ of ETF Value)

#	Ticker	Logo	Name	Sector	Weight
1	2330	T	Taiwan Semiconductor Manufacturing Co Ltd	Technology	23.9%
2	2317	H	Hon Hai Precision Industry Co Ltd	Technology	4.7%
3	2308	D	Delta Electronics Inc	Technology	4.6%
4	2454	M	MediaTek Inc	Technology	4.3%
5	3711	A	ASE Technology Holding Co Ltd	Technology	2.2%
6	2891	C	CTBC Financial Holding Co Ltd	Financials	1.8%
7	2881	F	Fubon Financial Holdings Co Ltd	Financials	1.7%
8	2382	Q	Quanta Computer Inc	Technology	1.6%
9	2345	A	Accton Technology Corp	Technology	1.6%
10	2303	U	United Microelectronics Corp	Technology	1.5%

Fund Mechanics

How It Works

The iShares MSCI Taiwan ETF is a passively managed exchange-traded fund that aims to track the investment results of the MSCI Taiwan 25/50 Index. This index is designed to measure the performance of the large and mid-capitalization segments of the equity market in Taiwan, representing approximately 85% of the free float-adjusted market capitalization. The '25/50' capping methodology ensures diversification by limiting the weight of any single issuer to a maximum of 25% and the aggregate weight of all issuers with over 5% of the index to 50%, mitigating single-stock concentration risk. The fund generally invests at least 80% of its assets in the component securities of its underlying index or in investments with substantially identical economic characteristics.

Holdings Breakdown

Number of Holdings

Top 10 Concentration

4784.0%

Turnover Rate

3600%

Category	Weight	Description
Information Technology	67.0%	Dominant sector reflecting Taiwan's leadership in semiconductors and electronics manufacturing.
Financial Services	15.9%	Exposure to Taiwan's banking and financial institutions.
Industrials	5.2%	Includes industrial manufacturers and service providers.
Basic Materials	3.8%	Companies involved in the production of raw materials.
Consumer Cyclical	3.5%	Companies sensitive to economic cycles, such as auto and retail.
Communication Services	2.1%	Telecommunication and media companies.
Consumer Defensive	1.3%	Companies providing essential goods and services, less sensitive to economic cycles.
Healthcare	1.2%	Pharmaceuticals, biotechnology, and healthcare equipment companies.

Cost Efficiency

Expense Ratio

0.59%

Median Bid-Ask Spread

0.128%

Expense Ratio History

Year	Expense Ratio
2025	0.59%
2024	0.59%
2023	0.59%

Performance History

Year	ETF Return	Benchmark Return	Tracking Diff	Volatility	Max Drawdown	Sharpe Ratio
2025	27.81%	28.17%	-0.36%	N/A	N/A	N/A
2024	16.79%	17.50%	-0.71%	N/A	N/A	N/A
2023	29.15%	29.52%	-0.37%	N/A	N/A	N/A
2022	-28.75%	-28.12%	-0.63%	N/A	N/A	N/A
2021	28.38%	29.40%	-1.02%	N/A	N/A	N/A

Annualized Return Since Inception

5.49%

Detailed Peer Comparison

Ticker	Name	Issuer	Exp Ratio	AUM (B)	1Y	3Y	5Y	Yield	StdDev 3Y	Sharpe 3Y	Spread
EWT ⭐	iShares MSCI Taiwan ETF	iShares	0.59%	US$7.0B	30.9%	24.5%	12.0%	0.04%	16.48%	1.34	N/A
FLTW	Franklin FTSE Taiwan ETF	Franklin Templeton	0.19%	US$0.6B	31.9%	26.2%	13.5%	0.03%	20.46%	N/A	N/A
Category Average			0.66%	—	0.3%	0.1%	-0.0%	0.02%	—	N/A	—

Risk Metrics

Beta

1.02

Standard Deviation

1 Year	3 Years	5 Years	10 Years
N/A	16.48%	23.53%	21.21%

Sharpe Ratio

1Y	3Y	5Y	10Y
N/A	1.34	0.67	0.86

Sortino Ratio

3 Years	5 Years
N/A	N/A

Maximum Drawdown

1 Year	3 Years	5 Years	Since Inception
N/A	N/A	N/A	-58.22%

Correlations

Liquidity & Trading

Volume

Avg Daily Shares

3,951,763

Avg Daily Dollar Volume

US$276.3M

Trend

increasing

Bid-Ask Spread

Metric	Value
Median (Percent)	12.800%
Median (Dollar)	US$0.09
During Hours	N/A
At Close	N/A
Volatility	moderate

Premium/Discount to NAV

Metric	Value
Current	116.56%
30-Day Average	80.00%
1-Year Average	N/A
Standard Deviation	N/A
Max Premium (1Y)	N/A
Max Discount (1Y)	N/A

Creation/Redemption Activity

Trend

increasing

Net Flows

Period	Net Flow
1 Month	US$0.0M
1 Quarter	US$0.0M
1 Year	US$0.0M

⚠️ Disclaimer: This ETF research report is for informational and educational purposes only. It does not constitute investment advice, a recommendation, or an offer to buy or sell securities. EC² Invest is not a registered investment advisor. All data is sourced from public sources and may contain errors. Past performance does not guarantee future results. ETF investing involves risk, including possible loss of principal. Always conduct your own research and consult with a qualified financial professional before making investment decisions.