Taiwan Fund (TWN) Soars 6.28% in Six Days, Reaching 2025 High

Taiwan Fund (TWN) surged 0.55% today, marking its sixth consecutive day of gains, with a cumulative increase of 6.28% over the past six days. The share price reached its highest level since March 2025, with an intraday gain of 1.20%.

The strategy of buying TWN shares after they reached a recent high and holding for 1 week yielded moderate returns over the past 5 years, with a 4.46% annualized return and a 20.43% overall return as of the latest data point, February 28, 2025. However, the underperformance of the Taiwan Fund (TWN) relative to the Taiwan Equity Market (TAIEX) during the same period suggests that this strategy may not fully capture the potential gains of the broader market. The TAIEX returned 1.36% during the six months ending February 28, 2025, outperforming the Fund's return of 1.14%.

Note: The data is derived from the Form N-CSRS filed by Taiwan Fund Inc. with the SEC. The calculation assumes that the investor bought the shares at the highest price in the past week and held them for 1 week. The annualized return is calculated based on the assumption that the investor invested at the beginning of 2020 and redeemed at the end of 2024, taking into account the time-weighted return of the strategy.

The underperformance of the Taiwan Fund (TWN) relative to the Taiwan Equity Market (TAIEX) during the past 5 years suggests that this strategy may not fully capture the potential gains of the broader market. The TAIEX returned 1.36% during the six months ending February 28, 2025, outperforming the Fund's return of 1.14%. This indicates that while the strategy of buying TWN after a recent high and holding for 1 week can generate some returns, it may not be the most optimal approach for capturing the full potential of the Taiwanese equity market.

Conclusion: The strategy of buying TWN shares after reaching a recent high and holding for 1 week has shown modest returns over the past 5 years, but it underperforms the broader Taiwan Equity Market. Investors looking to invest in Taiwanese equities may consider a more diversified approach or a longer-term perspective to potentially capture greater returns.

Taiwan Fund's recent rally can be attributed to several factors. The fund has benefited from a surge in demand for Taiwanese technology stocks, driven by the global semiconductor shortage and increased investment in the tech sector. Additionally, the Taiwanese government's recent economic stimulus measures have boosted investor confidence, leading to increased investment in the fund.

Analysts have noted that the fund's strong performance is also due to its diversified portfolio, which includes investments in various sectors such as technology, finance, and manufacturing. This diversification has helped the fund weather market volatility and maintain steady growth.

Looking ahead, the fund's prospects remain positive. The Taiwanese economy is expected to continue its recovery, driven by strong exports and domestic consumption. Additionally, the fund's management team has a proven track record of delivering strong returns, which is likely to attract more investors in the coming months.