Taiwan's Fund Managers Quit Jobs to Invest Personally
News related to:Taiwan Semiconductor Manufacturing Company Limited · 3 min read
NEW YORK, Oct. 19, 2026 /CourierPR/ -- Taiwan's benchmark stock index has surged 62% this year, the best performance among major equity gauges globally. According to Bloomberg, some of the island's professional fund managers and analysts are leaving their jobs to invest their own money. This move is driven by the significant discrepancy between the returns on the stocks they recommend and their personal portfolios.
The strict rules that prevent fund managers from trading the very stocks they pick for clients have become increasingly untenable. These rules bar staff from trading a locally listed stock or a linked derivative within seven business days before or after their firm's funds trade it. In practice, this means fund managers cannot engage in personal stock-picking. Additionally, they must lock away their phones, laptops, and smartwatches each morning until the market closes at 1:30 p.m., a rule formalized in 2024 to deter insider trading. Six former fund managers from four firms were indicted for front-running trades through the accounts of relatives and friends.
Ken Tsai, a 40-year-old fund manager who worked at a large Taiwanese asset manager until July, told Bloomberg that he made a Taiwanese maker of AI-server data-transfer components his fund's largest holding in 2024. The stock rose more than fivefold in 2025 and about sixfold again this year, but Tsai owned none of it personally. Tsai now works at a private investment firm in Taipei.
The private investment firms they are joining are outside the rules. They register as private companies with the Ministry of Economic Affairs and do not need asset-management licenses from the Financial Supervisory Commission because they do not raise public money. Some of these private shops now generate more than NT$10 billion in monthly trading volume, rivaling mid-sized asset managers.
Much of the rally in Taiwan's stock market traces back to the AI hardware supply chain. Taiwan Semiconductor Manufacturing Company Limited (TSMC) reported third-quarter revenue of NT$1.49 trillion (US$46.7 billion) on October 15, up 50.9% from a year earlier. Net income jumped 68.7%, and gross margin reached 66.4%. TSMC guided fourth-quarter revenue from US$52.3 billion to US$54.3 billion. Chip packaging and testing has also benefited, with ASE Technology reporting September net revenue of NT$88.1 billion, up 45.5% from a year earlier, and third-quarter revenue of NT$244.2 billion, up 44.8%.
Mature-node foundry United Microelectronics Corporation (UMC) reported August sales up 30.71% from a year earlier, lifting year-to-date sales 14.66%. In its second-quarter report, UMC guided for capacity utilization above 90% in the third quarter and said revenue from its 22/28nm business continues to set record highs.
The churn in the industry is more about talent movement than an exodus. Fewer than half of Taiwan's 20 largest local equity mutual funds have kept the same portfolio manager for more than three years. Applications for junior roles at some international firms have roughly halved this year. However, the Financial Supervisory Commission reported that the industry's registered headcount actually rose to 4,729 in September from 4,581 at the end of 2025. Firms are responding by offering cross-market analyst roles and office rotations to keep staff.
Regulators are taking notice. The Financial Supervisory Commission said on October 15 it is gathering information and plans to review the rules, balancing market development against conflicts of interest and investor protection. One asset-management executive told Bloomberg there is no easy solution for now.
Despite the challenges, some professionally managed funds have kept pace. The Taiwan Fund, a closed-end fund listed in New York, reported a 47.36% total return for its fiscal quarter ended May 31, against 26.12% for the TAIEX Total Return Index over the same period. At the end of that quarter, the fund's net asset value stood at US$116.90 a share. Investors who prefer to own the whole market can use the iShares MSCI Taiwan ETF, which holds about US$11.9 billion in assets.
Last week was a reminder of how quickly the market can change. The TAIEX fell 4.6% in a single week, its first weekly decline in five weeks, as a technology selloff spread. TSMC's shares fell 8.98% from the October 9 close to $412.61 on October 16, ASE dropped 14.86% to $39.53, UMC slid 13.68% to $19.82, the iShares fund lost 7.04% to $106.26, and The Taiwan Fund declined 8.78% to $94.18.