Living in Taiwan and watching friends make money with Index 0051, How are you guys gauging the “China Factor” risk vs. these 40% returns?

Hi everyone, I’ve been living in Taiwan for the last 10 years, I have some Taiwanese friends heavily invested into Taiwan index funds, specifically the Yuanta Mid-Cap 100 (0051) and the Taiwan Top 50 (0050). Looking at the last three years (2023-2026), these funds have posted incredible performance, with some metrics showing a total return of nearly 40% annualized. I know Taiwan has been the "AI engine" of the world lately, but I have a few questions for the seasoned investors here: 1. TSMC alone is often 30-50% of the large-cap index. Is it better to just buy TSMC directly, or is there a real diversification benefit to the Mid-Cap 100 (0051)? 2. I love Taiwan and plan to make Taiwan my home for the rest of my life. But not going to lie, the whole China thing does makes me a bit hasitant to invest in stocks or real state here. Does the high return justify the potential tail risk? 3. For those outside Taiwan, do you prefer the US-listed EWT (iShares MSCI Taiwan ETF) or is it worth the effort to gain direct access to the local TWSE-listed funds? Would love to hear perspectives from anyone currently overweight in Taiwan