ETFs become new favorites among investors in Taiwan

Taipei, Jan. 8 (CNA) Exchange-traded funds (ETFs) became major targets for investors in Taiwan in 2024, with high dividend payouts ETFs particular popular, the Taiwan Depository and Clearing Corp. (TDCC) said Wednesday.

In a statement, TDCC cited a survey as saying that the Cathay MSCI Taiwan ESG Sustainability High Dividend Yield ETF coded 00878 replaced China Steel Corp., the largest steel maker in Taiwan, as the stock owned by the largest number of shareholders in Taiwan in 2024.

An ETF, a pooled investment security, which is traded like an individual stock, is able to track from the price of a single stock to a large and diverse collection of securities.

After 00878, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) came in second and was followed by China Steel, the Yuanta/P-shares Taiwan Dividend Plus ETF coded 0056, and the Capital TIP Customized Taiwan Select High Dividend ETF coded 00191 in 2024.

In 2023, China Steel took the top spot with the largest number of shareholders ahead of TSMC, 00878, 0056, and KGI Financial Holding Co.

The top five stocks each had more than 1 million shareholders and the rankings showed investors favored ETFs over individual stocks, which has become an investment trend, TDCC said.

By age, TSMC was one of the top five stocks owned by generation α aged 0-11, generation Z aged 12-27, and generation Y aged 28-43, while the other four were all ETFs with the top choice being 00878 in 2024, TDCC said.

On the other hand, generation X aged 44-59, baby boomers aged 60-78, and investors older than 78 favored China Steel as their top choice and their portfolios included fewer ETFs from the top five stocks in 2024, TDCC added.

The TDCC figures echoed a previous statement released by the company that the number of shareholders of listed ETFs on the Taiwan Stock Exchange rose by almost 70 percent from a year earlier to more than 10 million in 2024.

Taiwan listed its the first EFT -- 0050 -- in 2003. More than two decades later, the country lifted a ban on trading active ETFs and multi-asset ETFs in August 2024 as part of its efforts to transform itself into a wealth management hub in Asia.

Currently, a total of 181 ETFs are listed on the local market with NT$3.48 trillion in aggregate assets, according to TDCC.

Meanwhile, TDCC said that as of the end of 2024, the local stock market had 12.98 million investors, up 700,000 from a year earlier.

(By Pan Chih-yi and Frances Huang) Enditm/AW