Franklin FTSE Taiwan ETF

FLTW

Market cap $677M

The Franklin FTSE Taiwan ETF is one of two ETFs that offer pure-play coverage to Taiwanese stocks, with giant-caps accounting for the majority of the portfolio. FLTW has some structural flaws, but in the areas where it matters (cost efficiency, performance track record), it shines over its larger peer, EWT. Taiwanese exports are currently growing at a record pace of over 50%, with tech exports fuelling this momentum (FLTW has 70% exposure to tech stocks).

Easing tensions between China and the U.S. may be supportive of markets. Still uncertainty amid plans for Trump to visit China in 2026.

Despite mounting macro headwinds at the start of the year, Chinese equities have continued to deliver positive performance. While near-term flows can provide further upside, the durability for the equity rally will hinge on policy choices ahead.

Among APAC equity markets, Australia has a higher beta to oil prices while India, Indonesia and Thailand have lower betas. Domestic political uncertainties have been one main reason for the decoupling trend seen in Indonesia and Thailand.

Herald van der Linde from HSBC Global Research shares his Asian markets picks and explains why 'particularly cheap' South Korean equities could outperform Taiwanese equities this year.

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Sentiment remains fragile in China and Hong Kong stock market even China services activities have improved in December. Weak market breadth and a persistent bearish trend of the Chinese yuan since November has added to more woes to the Hang Seng Index.

FLTW has a high exposure to technology stocks. These technology stocks benefit from many technological megatrends such as AI, cloud computing, AR/VRs, Internet of Things, etc. The fund is trading at an expensive valuation relative to its historical valuation range.

China's stimulus plan head lead to big fund flows in ETFs. The trend towards private asset ETFs continues to gain steam.

Data largely came in weaker than already cautious forecasts, and with a less supportive base effect, we will need to see a significant stimulus push to reach this year's growth target. Looking at the output of industrial products, we can see the clear impact of the property market decline play out.