Nippon India Taiwan Equity Fund tops return chart with 22% in May. Can the momentum sustain?

ETMarkets.com Short-term rallies tend to be volatile and unsustainable as they are often event-driven.
Nippon India Taiwan Equity Fund emerged as the top performer among all equity funds — including sectoral and thematic — in May, delivering a return of 21.69%. This was out of a universe of approximately 558 funds during the period.
Experts attribute this performance to a sharp rally in Taiwanese technology and semiconductor stocks, which benefited from strong global demand for electronics.
Also Read | NFO Insight: Nippon Income Plus Arbitrage Active FoF opens. Is it time to add this emerging category to your portfolio?
'Over the past few months, international markets have experienced increased volatility, largely driven by country-specific events. In China, the announcement of a major stimulus package in late September 2024 sparked a sharp market rally. Similarly, in the U.S., post-election speculations, tariff wars, trade deals, etc. ,increased market activity,' Chirag Muni, Executive Director, Anand Rathi Wealth Limited, shared with ETMutualFunds.According to Chirag Muni, short-term rallies tend to be volatile and unsustainable as they are often event-driven. Over the long term, Indian markets have outperformed international funds, offering higher return potential and a broader range of investment categories."Indian markets offer easier access to data and are simpler to track, making them more suitable for investors. Given the complexity of global markets, well-diversified domestic funds remain the better choice for investors,' he added. Another expert highlights four key factors influencing a fund's performance: returns relative to the underlying index, currency movements, the performance of the Indian rupee against the U.S. dollar, and the fund manager's value addition.
There is a high correlation of Taiwan stocks with the US Nasdaq Composite index as TAIEX's 50–60% weightage is in semiconductors and electronics (e.g., TSMC, Hon Hai), aligning closely with the Nasdaq's tech-heavy composition, he added.
'Both indices are highly sensitive to global chip demand and U.S. tech sentiment, amplifying their correlation. For the month of May, Nasdaq gained 9.56%, which led to accelerated gains in Taiwan-based technology companies in the portfolio,' Atul Shinghal, Founder and CEO, Scripbox, shared with ETMutualFunds.
As per the last data available, Nippon India Taiwan Equity Fund had an AUM of Rs 276 crore as on April 30, 2025. Launched in December 2021, the scheme is managed by Kinjal Desai.The primary investment objective of Nippon India Taiwan Equity Fund is to provide long-term capital appreciation to investors by primarily investing in equity and equity-related securities of companies listed on the recognised stock exchanges of Taiwan, and the secondary objective is to generate consistent returns by investing in debt and money market securities of India.There were around 65 international funds in the mentioned time period, of which 11 offered double-digit returns, 52 offered single-digit returns, and only two gave negative returns.
Also Read | Should you consider starting SIP or lumpsum in a momentum index fund right now?
Invesco India - Invesco Global Consumer Trends FoF offered the second highest return of around 15.70%, followed by DSP US Flexible Equity FoF and Edelweiss US Technology Equity FOF, which gave 13.90% and 12.09% returns respectively in May.Among the double-digit performers, the last five were Nasdaq-based funds, which gave returns ranging from 10.25% to 11.47% in May.Post looking at the performance of these international funds, Chirag Muni advises that investors should avoid reacting to short-term trends and instead focus on fundamentals and long-term growth, as over the longer horizon, Indian markets have delivered stronger performance.On the other hand, Shinghal believes that the technology sector, as represented by the Nasdaq Composite Index, remains the main driver for the performance of Taiwanese Stocks, and the outlook for the technology sector remains positive in the long run as current and future innovations are either driven or enabled by this sector. In the current calendar year so far, international funds have offered up to 29% return with Edelweiss Europe Dynamic Equity Offshore Fund being the top performer with 29.12% return in 2025 so far. Mirae Asset Hang Seng TECH ETF FoF has given a 20.17% return in the current calendar year so far. In 2025 so far, Nippon India Taiwan Equity Fund has offered a negative return of 3.47%. Shinghal of Scripbox believes that global equities outside the U.S. and India are currently trading at more attractive valuations. Historically, non-U.S. markets have outperformed during periods of U.S. dollar weakness. 'Hence, International Funds (especially Non-US) should get allocation in an Investor's portfolio depending on risk appetite,' he added.Whereas the expert from Anand Rathi Wealth Limited firmly recommends not to invest in international funds, but if one looks for global diversification in the portfolio, can explore only upto 5 -10% of the overall portfolio, however it is important to look at the risk adjusted return potential of the respective country before investing. 'Investors can consider investing across the range of domestic diversified equity funds to get exposure across the range of categories and sectors to generate good alpha and returns in the long term,' Chirag added.One should always consider their risk appetite, investment horizon and goals before making any investment decision.
( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@timesinternet.in alongwith your age, risk profile, and twitter handle

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Business Standard

28 minutes ago

• Business Standard

DGCA launches comprehensive special audit plan to end siloed safety checks

The Directorate General of Civil Aviation (DGCA) has rolled out a new 'comprehensive special audit' framework for India's aviation sector that aims to move beyond siloed safety assessments and carry out integrated evaluations across airlines, airports, maintenance firms, training institutes, and ground handling agencies. 'Traditionally, regulatory and safety oversight functions within Indian aviation have been conducted in silos, with different directorates (of DGCA) performing inspections and audits specific to their respective domains. These activities include planned/unplanned surveillance inspections, random spot checks and ramp inspections, which primarily assess compliance and safety within individual aviation segments,' the regulator stated. On June 12, Air India's London-bound AI171 flight crashed shortly after take-off from Ahmedabad, killing 229 passengers, 12 crew members, and 34 people on the ground. Issued on June 19, the DGCA circular mentioned the need for 'a 360-degree evaluation of the aviation ecosystem, reflecting both its strengths and areas needing improvement'. Going beyond the annual surveillance audits currently in place, the special audits will be carried out by multidisciplinary teams led by senior officials from the regulator. These teams will include personnel from various DGCA divisions—such as flight standards, air safety, airworthiness, aerodrome standards, and air navigation—and may also bring in external experts when needed. The audits will examine three broad areas: the effectiveness of an organisation's Safety Management System (SMS), the robustness of its operational practices, and compliance with regulatory provisions. Each audit will involve a combination of techniques, including on-site inspections, document reviews, interviews with operational staff, safety data analysis, and training record checks. 'These audits will be over and above the Regulatory Audits carried out as per the Annual Surveillance Programme,' the DGCA said. They will apply to all major players in the civil aviation system, including not just airlines and airports but also Maintenance, Repair and Overhaul (MRO) providers, training academies, and even entities that manage emergency response systems and supply chains. The regulator will initiate these audits either routinely—such as through annual assessments or post-implementation reviews—or in response to specific triggers like serious incidents, regulatory violations, or findings by UN body International Civil Aviation Organisation (ICAO). In urgent cases, audits may begin without notice. Otherwise, entities will be given between three to fourteen working days to prepare. Audit findings will be categorised by severity. The most critical will require corrective action within seven days, while others may be resolved over 30 or 90 days. 'Audited entities must submit a Corrective Action Plan… detailing root cause analysis, remedial actions, preventive measures, implementation timelines, and success metrics,' the circular stated. The DGCA has also made it clear that enforcement will follow in cases where findings are not addressed. 'Non-compliance… may result in progressive enforcement actions, including advisory guidance, formal warnings, operational restrictions, financial penalty, suspension, or revocation of licences,' it noted. To encourage transparency, the regulator has promised confidentiality of audit findings in line with international norms. 'The Special Audit upholds a confidential approach, aligned with ICAO Annex 19 principles, to foster open reporting and positive safety culture,' it said. The new audits, DGCA said, will 'provide a holistic evaluation of the aviation sector, meticulously examining safety, operational efficiency, and regulatory compliance'. The goal is to proactively identify systemic vulnerabilities, enhance resilience, and ensure alignment with international standards and India's own aviation safety objectives.

Business Standard

28 minutes ago

• Business Standard

Markets may dip as US strikes on Iran stoke oil fears, global volatility

Indian markets may open lower on Monday due to fears of crude oil disruption from the West Asia though domestic institutional investors may support valuations Sundar Sethuraman Mumbai Listen to This Article Investors may have to brace for a spike in volatility on Monday following the US military's direct involvement in the Israel–Iran conflict over the weekend. Experts believe benchmark Sensex and Nifty may correct 1–1.5 per cent if oil prices surge and Asian markets fall due to the widening of the West Asia conflict. However, domestic institutional investor (DII) buying could cushion the fall. Last week, the domestic markets had gained over 1.5 per cent even as hostilities between Iran and Israel escalated. On Saturday, President Donald Trump announced targeted strikes on three of Iran's key nuclear facilities—Fordow, Natanz, and Isfahan—using

Mint

34 minutes ago

• Mint

Vivek Oberoi's Net Worth: Bollywood actor credits early stock market exposure for building ₹1,200 crore fortune

Actor Vivek Oberoi, whose acting career didn't went well, has turned himself into a successful businessman by creating a ₹ 1,200 crore biz empire. During a recent interview on Owais Andrabi's Dubai Property Insider podcast, Vivek revealed that his father only played the role of a mentor in his life and never helped him financially. Vivek, son of actor and politician Suresh Oberoi, made his Bollywood debut in 2002 with Ram Gopal Verma's film 'Company', and became a household name with movie 'Saathiya' (2002), directed by Shaad Ali. Talking about how he built such a big empire, Vivek said that his father groomed him regarding economics and business from a very young age. 'He would bring me a product and would ask me to create an entire business plan about how I was going to sell it. I started understanding the nuances of business from the age of 10 because I was going from door to door to sell that stuff.' Vivek further said that his father used to tell him 'I am a rich man; you are not. You will get there, but you have to do it on your own.' He also credited his exposure to the stock market trading and real estate investments during his teenage years for shaping up his entrepreneurial journey. He said: 'I was able to raise $3 million for my first company, and I was only 19, and I made a lot of money for my investors and myself, and I sold the company by the time I was 23. If I hadn't been applying myself for all those years, it never would have been possible. Because I put in that work, now I have been able to take nine companies public on the Indian stock market, and I am planning to take four more.' As of April 2025 Vivek Oberoi has a net worth of ₹ 1200 crore, according to Forbes India. His ventures include BNW Real Estate Developers, a prominent player in the UAE luxury market, and Solitario, a lab-grown diamond brand. Other business ventures in which Vivek has invested include global brand accelerator Impresario Global, a gin brand called Rutland Square Spirits, and vehicle care platform ReadyAssist.