AI Chip Giants Force Stock Selling Among Asian Funds
Concentration in firms like TSMC and Samsung has reached record levels, forcing active managers to sell top performers to meet portfolio risk rules. This shift is driving historic outflows from active funds while fueling a surge in passive investment across Taiwan and South Korea.
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TSMC, SAMSUNG ELECTRONICS CO LTD, and SK HYNIX INC now command nearly 33% of the MSCI Asia Pacific ex-Japan Index. This concentration mirrors the dominance of the "Magnificent Seven" in the United States, forcing active managers to liquidate winning positions to meet diversification mandates. Investors face a market where index performance is tethered to a handful of chipmakers, increasing volatility and distorting regional benchmarks.
