Group 1 - Taiwanese investors are reassessing their long-standing preference for US dollar assets and shifting focus towards European investments, with total assets in European funds reaching NT$13.7 billion (approximately US$463 million), the highest level since 2019 [1] - In the first half of 2025, Taiwanese investors are projected to invest NT$14.1 billion in overseas funds focused on Europe, marking the largest semi-annual investment scale since 2021 [1] Group 2 - The total assets of US-focused local funds in Taiwan decreased by NT$538 billion in the first half of 2025, the largest semi-annual decline since records began in 2003 [3] - The assets held by Taiwanese investors in US-focused overseas funds also dropped by NT$121.6 billion, representing the largest decline since records began in 2006 [3] - As of the end of May, Taiwan held US$292.9 billion in US Treasury bonds, a decrease of US$5.9 billion from April, marking the largest single-month decline since September 2022 [3] Group 3 - The shift in investment strategy among Taiwanese high-net-worth institutional investors reflects a broader trend among Asian export economies seeking to diversify away from US markets, driven by factors such as trade wars and increasing political polarization in the US [3] - Morgan Stanley's market strategist Agnes Lin noted that institutional investors are rapidly reallocating their assets, indicating a long-term diversification strategy [3] Group 4 - Over 90% of the NT$22 trillion in overseas investments by Taiwanese life insurance companies are in US dollar assets, exposing them to significant currency risk [4] - The New Taiwan Dollar has appreciated over 11% against the US dollar this year, leading to exchange losses exceeding NT$145 billion for local insurance companies [4] - Discussions are emerging in Taiwan regarding the need for broader asset diversification due to the volatility of the New Taiwan Dollar, with affluent families increasingly inquiring about diversifying into other currencies, particularly the euro [4]

Core Insights - A significant shift in investor sentiment is observed as bond ETFs see inflows nearing those of stock ETFs, with bond fund inflows reaching $90 billion compared to $126 billion for stock funds in February [1] - Actively managed bond funds and short-term bond funds are the primary beneficiaries of this trend, with actively managed enhanced core bond funds attracting five times more new capital than their passive counterparts [1] - AI data center-related bonds are particularly popular among investors, driven by substantial capital expenditures required for AI infrastructure, with TCW Flexible Income ETF issuing $35 billion in bonds for this purpose [1] Group 1 - Short-term bond ETFs, especially ultra-short Treasury funds, have seen over 40% of total inflows into fixed income ETFs this year, appealing to investors seeking liquidity and low risk in a high-interest-rate environment [2] - The classic "60-40 investment portfolio" is regaining popularity as stock market volatility increases, indicating a potential shift back to traditional diversification strategies [2][3]