Amid Taiwan Stock Market Volatility: High Dividend Funds Demonstrate Resilience with a Dual Strategy of Technology and High Yields

Taiwan • Business • 19h ago
Amid Taiwan Stock Market Volatility: High Dividend Funds Demonstrate Resilience with a Dual Strategy of Technology and High Yields

Since 2025, the Taiwan stock market has experienced significant fluctuations due to tariff and currency wars, but high-dividend themed funds have demonstrated resilience, making them a stable investment choice. Statistics from CMoney indicate that actively managed Taiwan stock funds have dropped by an average of 16.5%, while high-dividend funds have only declined between 4% and 15%. Experts recommend that investors adopt a dual strategy of high-dividend and technology electronics stocks to strengthen the defensive capabilities and long-term return potential of their investment portfolios.

Key Updates

7h ago

For the first time in 28 months, TSMC Chairman C.C. Wei increased his shareholding by purchasing 20 lots of shares at the low point in April.

In April 2025, TSMC Chairman C.C. Wei purchased 20 lots of company stock on the centralized market when the stock price plummeted due to the U.S. "reciprocal tariffs" policy. This action was his first increase since December 2022. The purchase price ranged from 841 to 868 NT dollars, with a total expenditure of approximately 16.82 million to 17.2 million NT dollars. Several other TSMC executives also increased their holdings at this time, indicating internal confidence in the stock being at a low point. This move took place after TSMC's stock price dropped below 800 NT dollars, prompting both retail and institutional investors to enter the market.

11h ago

Latest Developments in Taiwan Stock ETF Market: 00940 Fails to Reach Issuing Price, 00730 Set to Go Ex-Dividend, FSC Relaxes Holding Restrictions, Female Investors Reach Record High

The Taiwan ETF market has been experiencing frequent activity recently. The Yuanta Taiwan Value High Dividend ETF (00940) completed its sixth dividend replenishment on May 8, but its stock price remains below the issue price, drawing the attention of investors. The Fubon Taiwan Quality High Dividend ETF (00730) is set to go ex-dividend on May 19, boasting an annualized yield of 6.13%. The Financial Supervisory Commission has relaxed ETF holding restrictions, allowing component stocks such as TSMC to be included according to their market value proportions. There is an increase in female investors participating in financial management, with the Cathay Sustainable High Dividend ETF (00878) with the number of beneficiaries surpassing 1.72 million, making it the top choice among housewives.

12h ago

In April 2025, amidst fluctuations in the Taiwan stock market, market-cap ETFs showed stable performance, with the FT Taiwan Smart ETF leading the way with a 17.3% gain, as the Taiwan stock market climbed back to 20,000 points.

In April 2025, the Taiwan Stock Exchange dropped more than 2,000 points due to global financial market turmoil and exchange rate fluctuations, hitting a low of 17,306 points. However, it quickly rebounded, with the weighted index climbing back to 20,235 points by April 30. Market-cap ETFs showed steady performance, especially the FT Taiwan Smart ETF (00905) by Franklin Templeton SinoAm, which gained 17.3% from April 9 to April 30, highlighting the resilience of its stock-picking strategy amid market volatility.

15h ago

The total market value of Taiwan stocks increased by over 400 billion TWD in a week: Stocks in the oil, electricity, and gas sectors led the gains, while the information services sector saw the most activity.

As of May 9, 2025, the Taiwan Stock Exchange Capitalization Weighted Stock Index rose by 127.4 points to 20,915.04 points, with a weekly increase of 0.61%. The total market value of all listed companies increased to 67.2714 trillion NTD, an increase of 4.13494 trillion NTD. The oil, electricity, and gas stocks led with a gain of 9.44%, while the home living stocks fell by 3.10%. The semiconductor stocks' transaction value was 4,100.44 billion NTD, accounting for 29.21%, and the information services stocks had the highest turnover rate at 18.82%.

19h ago

Amid Taiwan Stock Market Volatility: High Dividend Funds Demonstrate Resilience with a Dual Strategy of Technology and High Yields

Since 2025, the Taiwan stock market has experienced significant fluctuations due to tariff and currency wars, but high-dividend themed funds have demonstrated resilience, making them a stable investment choice. Statistics from CMoney indicate that actively managed Taiwan stock funds have dropped by an average of 16.5%, while high-dividend funds have only declined between 4% and 15%. Experts recommend that investors adopt a dual strategy of high-dividend and technology electronics stocks to strengthen the defensive capabilities and long-term return potential of their investment portfolios.

23h ago

Trump announces draft of US-UK trade agreement, US stock market rises, Taiwan stock market reaches a new high, semiconductor and IC design stocks draw attention.

On May 8, 2025, President Trump of the United States announced a draft of the first bilateral trade agreement with the United Kingdom, which includes tariff adjustments, expanding agricultural exports, and technological cooperation. The announcement boosted the three major U.S. stock indices, with the Dow Jones Industrial Average rising 254 points and the Nasdaq Composite increasing by 1.07%. The following day, the Taiwan stock market surged 371 points, with a focus on IC design and semiconductor supply chains, and stocks such as TSMC and MediaTek showing strong performance.

05/09 11:04

May 9, 2025, Taiwan Futures Market: The near-month contracts of Taiwan TAIEX futures and electronic futures saw a slight decline after hours, with market sentiment remaining stable.

On May 9, 2025, in the after-hours trading of the Taiwan futures market, the near-month Taiwan Stock Index Futures contract closed at 20,831.00 points, down 15.00 points, with a volatility of 0.31%. The near-month Electronics Futures contract closed at 1,132.30 points, down 0.55 points, with a volatility of 0.60%. The two major index futures experienced limited price movements, and market sentiment remained stable. There was a negative spread of 2.54 points between the electronics futures and the spot market, indicating conservative short-term expectations for electronics stocks.

05/09 11:04

On May 9, 2025, in the Taiwan Stock Index Options Market, proprietary traders are bearish, while foreign investors maintain a net long position in call options.

On May 9, 2025, the three major institutional investors showed divergent operations in the Taiwan options market. Proprietary traders took a bearish stance, net selling 2,653 call options and net buying 3,754 put options. Foreign investors maintained a net long position on call options, net buying 1,743 call options and slightly net selling 166 put options. Investment trusts did not conduct any trading. This reflects the different strategies institutional investors use to respond to market risks.

05/09 03:09

On May 9, 2025, the Taiwan Futures Market Night Session Rose: TAIEX Futures Closed at 20,680 points, Electronics Futures Closed at 1,125 points.

On May 9, 2025, in the post-market trading of the Taiwan futures market, the near-month Taiwan Stock Index Futures contract closed at 20,680 points, up 102 points, an increase of 0.5%. The near-month Electronics Futures contract closed at 1,125 points, up 10.6 points, an increase of 1.59%. Major index futures generally rose, indicating a stable trading environment and reflecting investors' confidence in the market. Other futures, such as the Semiconductor 30 and Taiwan Mid-Cap 100, also rose, but the Yuanta 20-Year U.S. Treasury Bond ETF Futures fell, indicating a divergence in trends between the stock and bond markets.

05/09 02:00

Taipei Stock Exchange opens strongly, rising over 100 points: led by TSMC, boosted by international trade news.

On May 9, 2025, the Taipei stock market was influenced by the new US-UK trade agreement, as well as news about the US-China trade negotiations, causing the weighted index to rise by 147.4 points to 20,690.8, hitting an intraday high of 20,762.38. TSMC opened with a significant jump of 20 NT dollars to 938, acting as the main driver. The market is still focused on the potential semiconductor tariff policy that the Trump administration might announce. The three major institutional investors collectively made net purchases of 740 million NT dollars, net short positions in foreign futures decreased, and options data showed a tug-of-war between long and short positions.

High Dividend Funds Show Resilience

According to the Economic Daily News, as of May 8, the average performance of 198 actively managed Taiwan stock funds has fallen by 16.5% this year. However, funds focusing on high dividend themes have shown relative resilience, with declines ranging from 4% to 15%. Notable performers include Shin Kong Taiwan High Dividend, Yuanta Taiwan High Dividend Quality Leaders, Nomura Taiwan High Dividend, Fuh Hwa Taiwan Technology High Dividend, and Taichung Bank Taiwan Premium Dividend Fund.

Fuh Hwa Taiwan Technology High Dividend Fund manager Yang Sheng-min pointed out that in the face of tariff and exchange rate uncertainties, the fund's strategy focuses on high-quality high-yield stocks and industry leaders with growth potential, while moderately allocating to domestic demand traditional industries to cope with the trend of New Taiwan Dollar appreciation. He emphasized that such funds not only provide stable dividends but also have the potential for capital gains, offering a defensive function in volatile markets.

Popular ETF 00878 Attracts Steady Inflows

Cathay Sustainable High Dividend ETF (00878), one of Taiwan's most popular high dividend ETFs, continues to attract capital inflows. According to Cathay Securities Investment Trust Co., Ltd., since its listing in 2020, the fund's size surpassed NT$300 billion by July 2024 and became the second ETF in Taiwan to exceed NT$400 billion by February 2025. Statistics show that as of early May, the number of Taiwan stock ETF investors was about 11.1189 million, with 15.5% holding 00878, meaning one in every 6.4 ETF investors owns 00878.

Despite a slight reduction in recent dividend amounts from NT$0.5 to NT$0.47, its stable dividend record and resilience continue to attract investors. Manager You Ri-jie noted that the dividend yield of Taiwan's high dividend companies is superior to global and US counterparts, and last year, Taiwan's listed companies' net profit after tax was nearly NT$3 trillion, the third highest in the past decade, indicating strong support for cash dividends.

Market Cap ETFs Show Resilience

In addition to high dividend funds, market cap ETFs have also demonstrated strong resilience during this market volatility. According to Prudential Market Cap Momentum 50 ETF (009803) manager Zhang Zhi-ling, in April, the Taiwan stock market fell by 2.23%, but the Taiwan 50 Index only fell by 1.21%, outperforming the Mid-Cap 100 Index's 3.8% and the OTC Index's 4.52%. She pointed out that large-cap stocks, due to their strong financial health and bargaining power, can attract capital replenishment after sharp declines, becoming a safe haven in volatile markets.

Institutional investors recommend prioritizing market cap and high dividend ETFs to enhance the stability and return potential of their investment portfolios through dual-axis allocation. Especially as the ex-dividend season approaches, these ETFs not only provide stable cash flow but also have the opportunity to participate in market rebounds.

Tech and Electronics Stocks Maintain Long-term Competitiveness

Despite recent pressure on tech stocks due to exchange rate and tariff policies, many fund managers remain optimistic about their long-term growth potential. Yang Sheng-min noted that tech and electronics stocks are the most competitive industries in Taiwan's stock market, especially AI supply chain-related companies, which have long-term growth potential. Once market uncertainties are resolved, tech stocks are expected to regain prominence in the market.

Additionally, according to Yuanta Securities, ETFs with the highest holdings of TSMC include Fubon Technology (65.39%), Yuanta Taiwan 50 (55.49%), and Fubon Taiwan 50 (55.45%). With the Financial Supervisory Commission relaxing the "TSMC clause" on May 8, allowing passive ETFs to increase the single constituent stock holding limit from 30% to 36%, market cap ETFs can more accurately track the broader market, further enhancing return performance.

High Dividend ETF Allocation Recommendations and Trend Observations

In choosing high dividend ETFs, experts recommend that investors pay attention to stock selection logic and industry diversification. The KGI Select High Dividend 30 ETF (00915) research team pointed out that ETFs with a multi-factor stock selection strategy of "high quality, high dividend, low volatility" can effectively avoid high dividend traps and enhance the stability of asset allocation.

Furthermore, the Taishin Taiwan Sustainable High Dividend Small and Mid-Cap ETF (00936) research team noted that with Taiwan's aging population and increasing retirement fund needs, high dividend ETFs have become an important tool for retirement financial planning, with longer holding periods and more stable capital flows.

References

People Also Ask...

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How can high-dividend funds withstand downturns during Taiwan stock market volatility?

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Why do high-dividend funds have an advantage in resilience amidst fluctuations in the Taiwan stock market?