With the Taiwanese equity market challenging its early July highs, we have seen a pick-up in activity in typically infrequently traded EWT (iShares MSCI Taiwan, Expense Ratio 0.61%) options.
Yesterday the September 16 puts traded in good size, with the ETF trading back up near its $16.45 intraday high from early July, and it appears that someone may be hedging longs against a potential pullback in the near
term, if not outright bearishly speculating on Taiwan.
The fund has seen modest inflows year to date of about $25 million, putting its asset base above $3.2 billion and making it the third largest “Asia Pacific Equity” fund listed in the U.S. marketplace behind two other iShares
products EWY (iShares MSCI South Korea, Expense Ratio 0.61%) and EPP (iShares MSCI Pacific ex-Japan, Expense Ratio 0.50%) which have $4.8 billion and $3.4 billion in AUM respectively.
Honing in on Taiwan moreso, EWT is one of only two ETFs focused specifically on equity exposure to the country, being many times the size of the other fund in the space, the lesser known FTW (First Trust Taiwan AlphaDEX, Expense Ratio 0.80%) which debuted in 2012.
FTW only has about $7.7 million in comparison to the larger and more established EWT, but the fund has posted notable out-performance head to head year to date, with a slight overall edge in comparative gross performance since inception.
Trading activity has not only increased in EWT lately but also to some degree in FTW, as we see larger volume days in the past ten-twelve sessions or so, but not necessarily a day over day increase in trading volume in the product.