Nippon India Taiwan Equity Fund: Everything You Need to Know

As global supply chains shift and the “China+1” strategy gains traction, Taiwan has emerged as a critical hub in the technology and semiconductor ecosystem.

While Indian stocks have delivered negative returns, Taiwanese stocks have delivered positive returns, with the Taiwan Capitalization-Weighted Stock Index (TAIEX) delivering 53% over the last year.

The Nippon India Taiwan Equity Fund provides exposure to this segment by investing predominantly in Taiwanese equities, with a portfolio built around industry leaders.

The fund combines a high-conviction approach with selective diversification, aiming to capture Taiwan’s export-led growth and innovation ecosystem.

Let’s take a closer look at the fund…

About the Nippon India Taiwan Equity Fund

The Nippon India Taiwan Equity Fund was launched on 11 December 2021. It is an open-ended equity scheme following a Taiwan-focused theme.

As of 28 February 2026, the fund holds a month-end Asset Under Management (AUM) of Rs 5.2 bn. The expense ratio of the direct plan is 0.98%.

It’s benchmarked against the TAIEX Total Return Index (TRI), which measures the aggregate of listed stocks on the Taiwan Stock Exchange.

Investment Strategies

The fund’s primary goal is to provide long-term capital appreciation by investing predominantly in equity and equity-related securities of companies listed on recognised stock exchanges in Taiwan. Its secondary objective is to generate consistent returns by investing in debt and money market securities in India.

The fund’s investment philosophy utilises a blend of top-down and bottom-up approaches without an extreme sector bias. It aims to build a high-conviction portfolio by identifying industry leaders with a long-term horizon. The fund also maintains a flexible cash position to help minimize potential drawdowns.

Fund Managers

Fund managers play a crucial role in managing mutual funds. The Nippon India Taiwan Equity Fund is managed by a team of three professionals: Kinjal Desai, Divya Dutt Sharma, and Lokesh Maru.

Desai is the lead fund manager (overseas investment). She also manages the Nippon India Consumption Fund, Nippon India ETF Hang Seng BeES, Nippon US Equity Opportunities Fund, Nippon India Japan Equity Fund, and Nippon India Multi Asset Allocation Fund.

She has been managing this scheme since its inception on 11 December 2021. She holds an MSc in Economics and has over 13 years of overall professional experience.

Desai has been with Nippon Life India Asset Management Limited since December 2012. She initially worked in equity research and stock selection before becoming the dedicated fund manager for overseas investments in May 2018.

Sharma is the assistant fund manager (overseas investment). He has over 5 years of experience and began co-managing the scheme on 5 September 2025. He holds a Bachelor of Commerce and an MSc in Banking & Finance.

Maru is also the assistant fund manager (overseas investment). He also began co-managing the scheme on 5 September 2025. He holds a Bachelor of Technology, along with CFA and FRM designations, and has over 9 years of professional experience.

Prior to his current role, he joined NAM India as a Research Analyst in February 2020. He previously worked as a Quantitative Research Analyst at BlackRock Services India Private Limited and as a Quantitative Analyst at CRISIL.

Asset Allocation

Under normal market conditions, the scheme aims to allocate 80-100% of its total assets to Taiwanese equities and 0-20% to debt and money market instruments. The fund’s debt allocation is primarily used for cash management.

As of 28 February 2026, the fund’s asset allocation stood at 86.17% in equities and 13.83% in cash and other receivables.

Portfolio Positioning

The portfolio is structured to capitalise on Taiwan’s leadership position in the global semiconductor industry and its strong science and technology infrastructure.

In sector allocation, semiconductors account for the largest share (21.49%), followed by semiconductor materials and equipment (18.72%), electronic components (14.31%), and technology hardware, storage, and peripherals (10.46%).

The portfolio is highly concentrated with only 26 stocks. The top five individual stock holdings in the portfolio are Chroma Ate (9.65%), Mpi Corporation (8.30%), WinWay Technology (7.92%), Alchip Technologies (6.81%), and Asia Vital Components (6.14%).

The portfolio price-to-earnings ratio is 50.8, indicating a premium valuation.

The fund follows a measured churn strategy, reflected in its portfolio turnover of 0.66. This indicates a preference for holding positions with a moderate amount of churning.

With a standard deviation of 27.51, the fund’s volatility is higher than the benchmark TAIEX TRI (18.18). A higher value indicates that the fund’s returns fluctuate more than the category average.

Despite that, the scheme outperforms the benchmark in mitigating drawdowns, with a Sortino ratio of 0.8, higher than the benchmark (0.6). A higher Sortino ratio indicates that the fund generates stronger returns while taking relatively lower downside risk during market declines.

As a result, with a Sharpe ratio of 0.39 compared with the benchmark’s 0.32, the fund also outperforms on a risk-adjusted basis. A higher value indicates the fund delivers better risk-adjusted performance across all market conditions.

This is reflected in its performance. The fund has delivered a CAGR of 30.56% over the last three years, beating the benchmark return of 19.59%.

Inherent Risks

As the fund invests extensively in foreign assets, it is exposed to currency risk. Fluctuations in foreign exchange rates relative to the Indian Rupee can adversely affect the value of the fund’s investments.

The scheme is also subject to country-specific risks, including changes in economic, political, or regulatory conditions.

Conclusion

The Nippon India Taiwan Equity Fund stands out for its tightly focused international strategy built around Taiwan’s role in the global technology and semiconductor supply chain.

Its portfolio construction reflects this clearly, with high conviction and limited diversification across just 26 stocks.

The exposure is narrow, both in terms of country and sector, which increases dependence on Taiwan’s tech cycle and global semiconductor demand.

This positioning has translated into strong performance over the past two years, with the fund performing well ahead of its benchmark.

In essence, the fund offers a differentiated way to participate in Taiwan’s technology ecosystem. But the same factors that drive its upside, concentration, sector focus, and global linkage, also define its risks.

Happy investing.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here…

The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary