Market Trends: New Directions for Fund Investment in H2 2026
As 2026 enters the second half, global financial markets are gradually clearing after experiencing volatility in the first half. According to the latest data, as of July 25, the total scale of domestic funds in Taiwan exceeded NT$8.5 trillion, setting a record high. Among them, ESG (Environmental, Social, Governance) themed funds and technology innovation funds became the main targets of capital inflows, growing 35% and 28% respectively year-on-year.
Experts pointed out that global economic data for Q2 2026 shows easing inflationary pressures, and expectations of a shift toward accommodative monetary policies by major central banks are heating up, driving a rebound in risk assets. Against this backdrop, fund investment has become an important tool for investors to combat inflation and pursue long-term growth. However, geopolitical risks and inventory adjustments in some industries remain market variables; how to select fund targets and control volatility risks becomes the key to financial management in the second half.
ESG Funds: Sustainable Investment Becomes Mainstream
The ESG investment boom continues to heat up. According to the latest report from Morningstar, global sustainable fund net inflows reached $120 billion in Q2 2026, the second highest quarterly level on record. In Taiwan, after the Financial Supervisory Commission (FSC) promoted the "Green Finance Action Plan 3.0," the issuance of local ESG funds has accelerated. By the end of July, there were over 40 ESG-related funds, with a total scale exceeding NT$1.2 trillion.
Advantages and Selection Strategies of ESG Funds
- Stable Long-Term Performance: Research shows that companies with higher ESG ratings experience smaller declines during economic recessions, and their long-term returns are not inferior to traditional indices.
- Policy Dividend Boost: Governments worldwide continue to increase support for carbon emission reduction and renewable energy subsidies, driving strong growth momentum in related industries.
- Better Risk Control: ESG factors help screen companies with good governance and low environmental risks, reducing portfolio volatility.
Fund experts suggest that when selecting ESG funds, investors should check whether the fund holdings fully disclose ESG screening criteria and whether the management fee rate is reasonable. Taking the "Fuh Hwa Taiwan ESG Sustainable High Dividend Fund" which performed well this year as an example, its annualized return rate is 18.5%, with a dividend yield of approximately 5.2%, balancing growth and income.
Technology Innovation Funds: AI and Semiconductor Leading
After undergoing inventory adjustments in the first half of 2026, technology stocks regained momentum in the second half due to the full-scale explosion of AI applications. According to IDC, global AI-related spending is expected to exceed $500 billion in 2026, a year-on-year increase of 32%. Taiwan's semiconductor industry benefits from advanced processes and AI chip demand, with leading companies like TSMC and MediaTek continuing to achieve record revenues.
Key Allocation Points for Technology Funds
- AI Supply Chain: Includes chip design, advanced packaging, thermal modules, etc., with high growth certainty.
- Cloud and Edge Computing: Enterprise digital transformation drives demand for servers and data centers.
- Electric Vehicles and Energy Management: Areas such as automotive chips and battery management systems continue to expand.
The "Yuanta Taiwan AI Revolution Fund" issued by domestic investment trusts has risen 22.3% so far this year, mainly holding AI concept stocks such as TSMC, Quanta, and Wistron. Experts remind that technology funds are highly volatile and suggest investors use dollar-cost averaging to spread risk and set profit-taking points.
Fund Allocation Suggestions: Combining Dollar-Cost Averaging and Lump-Sum Investment
Facing market uncertainty in the second half, fund managers suggest investors adopt a "core-satellite" strategy: the core position mainly consists of global equity or balanced funds, while the satellite position allocates ESG or technology theme funds. Dollar-cost averaging is suitable for long-term wealth accumulation, while lump-sum investment can seize opportunities after market corrections.
Financial planners say that the current market P/E ratio is at the historical median and not excessively bubbly, so aggressive investors can increase the proportion of equity funds to 70%, while conservative investors should keep it below 50%. As for bond funds, the US Treasury yield curve has steepened, and short-term bond funds provide better hedging functions.
Risk Management and Precautions
Fund investment is not guaranteed. In the second half of 2026, attention should still be paid to the following risks: policy uncertainty during the US presidential election year, the strength of China's economic recovery, and the impact of oil price fluctuations on inflation. Investors are advised to regularly review fund performance and adjust allocations based on changes in fund net asset values.
Finally, when selecting funds, be sure to read the prospectus carefully, pay attention to the stability of the fund management team and the fund turnover rate. Through Mazhu Investment's fund comparison tool, investors can easily screen high-quality funds that match their risk profile and seize wealth appreciation opportunities.
