Will the national security fund exit cause a decline? 279 days of market support broke records, delivering a 50% return on investment and a profit of 6.5 billion

Taiwan’s stock market has reached a critical turning point after surpassing 30,000 points. The National Financial Stabilization Fund held its 127th regular committee meeting on January 12, and decided to end the market stabilization measures that started in April 2025, officially marking the conclusion of the longest market support operation in history. This support operation lasted 279 days, setting a new record in duration, and also delivered impressive financial results. With an actual investment of NT$12.2 billion, it yielded a profit of NT$6.5 billion, with a book return of over 50%.

From Market Rescue to Successful Exit

The National Security Fund initially intervened on April 9, 2025, in response to international financial conditions and market confidence fluctuations. After more than nine months of operation, the committee believes that the conditions for activation under Article 8 of the “National Financial Stability Fund Establishment and Management Regulations” are no longer met—that is, the risk of “major internal and external events or abnormal capital movements leading to market disorder” no longer exists. Therefore, a return to normal market mechanisms has been decided.

The core reasons for this assessment are threefold:

• The Taiwan stock index has stabilized at a historic high, with active trading and stable orderliness
• Taiwan’s overall economic fundamentals remain strong, with exports and semiconductor momentum continuously supporting corporate profits
• With risks significantly reduced, continued intervention by the National Security Fund is no longer consistent with its institutional role

Record-breaking Entry Timing for the National Security Fund

Although this wave is called the longest market support in history, the actual amount involved was quite restrained. According to publicly available data, the actual funds invested amounted to just over NT$12.2 billion, only a small fraction of the NT$500 billion available for deployment.

However, since the entry coincided with a market downturn and Taiwan’s stock market surged significantly in the second half of 2025, the market value of the listed stocks held by the fund increased substantially. By the end of 2025, unrealized valuation gains due to stock price increases amounted to approximately NT$6.44 billion. Additionally, the fund received about NT$195 million in cash dividends. After deducting NT$93.25 million in interest expenses, the total profit for the year reached NT$6.53 billion. In terms of investment return, this support operation achieved a book return of over 50%, making it one of the most successful operations in the history of the National Security Fund.

Q4 Quarterly Report of the National Security Fund: Profits Entirely Dependent on Stock Price Appreciation

From the Q4 114th quarterly report, it can be seen that as of the end of 2025, the fund’s assets totaled approximately NT$18.74 billion, of which about NT$18.69 billion were in stock holdings measured at fair value through profit and loss, nearly all invested in the stock market. Meanwhile, the fund’s long-term borrowings reached NT$12.162 billion, accounting for about 65% of total assets, indicating that this wave of support mainly relied on leveraging borrowed funds to establish stock positions rather than solely relying on existing surplus funds.

The financial statement notes reveal that the profit for this period was about NT$6.53 billion, mainly derived from an increase in the fair value of listed stocks by approximately NT$6.44 billion and about NT$195 million in cash dividends, minus NT$93.25 million in interest expenses. This shows that profits were highly dependent on valuation gains driven by stock price increases.

What Will Happen After the National Security Fund Withdraws?

Although the fund has announced the cessation of its market stabilization tasks, it is not disbanded or permanently withdrawn. The staff units will continue to monitor domestic and international political and economic changes. If the market experiences significant turbulence again, they can convene meetings at any time to decide whether to restart the ninth support operation.

For the market, this withdrawal has more symbolic significance than actual impact. Since the actual amount invested by the fund was limited and no immediate stock liquidation was announced, it does not pose an obvious selling pressure in the short term. Most analysts believe that, given the index’s record highs, strong corporate profits, and industry momentum, the fund’s decision to exit swiftly is actually a reassurance of market stability.

This article, “Will the National Security Fund’s Exit Cause a Drop? Record-breaking 279-day Support Period and 50% Return Yielding NT$6.5 Billion Profit,” was first published on Chain News ABMedia.