Fund Managers Forced to Sell Taiwan Semiconductor After 52% AI Rally
TSM•Fund managers at Jupiter Asset Management sold TSMC, Samsung and MediaTek after 52%, 159% and 184% rallies this year due to concentration limits. These three tech giants now make up nearly one-third of the MSCI Asia Pacific ex-Japan Index, triggering structural challenges for active managers.
1. Explosive AI-driven rallies
Driven by surging demand for AI chips, Taiwan Semiconductor Manufacturing Company has rallied 52% this year, while Samsung and MediaTek have jumped 159% and 184% respectively, making these three the top contributors to Asian tech returns.
2. Concentration triggers forced selling
Concentration limits have forced active managers to trim positions in these stocks as they now represent almost a third of the MSCI Asia Pacific ex-Japan Index, prompting portfolio rules to classify holdings as overweight and mandate divestment.
3. Structural challenges and market distortions
TSMC alone accounts for 41.5% of Taiwan’s TAIEX and Samsung plus Hynix comprise 55% of South Korea’s KOSPI, creating index distortions that hamper diversification, increase forced selling cycles and pressure regional currencies like the Korean won.
