After stock slip, Taiwan's '0050' ETF becomes more affordable to investors

Taipei, June 18 (CNA) Following a 4-for-1 stock slip, Yuanta/P-shares Taiwan Top 50 ETF, coded "0050," has become much more affordable when trading of it resumed on Wednesday, dealers said.

Trading of the ETF, or exchange-traded fund, which was issued by Yuanta Securities Investment Trust Co. in June 2003, was suspended from June 11-17 in preparation for the stock split.

An ETF, a pooled investment security that is traded like an individual stock, can be tracked from the price of a single stock to a large and diverse collection of securities.

For the 0050 ETF, it closely tracks the performance of the Taiwan 50 Index, which consists of the largest 50 companies in terms of market capitalization, including the contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), and is also the first narrow-based index published in Taiwan.

The 0050 ETF is the first ETF and the largest in terms of fund size in Taiwan.

Before the stock split, the ETF price closed at NT$188.65 on June 10. After the stock split, the closing price became NT$47.16.

The change means investors could spend less than NT$15,000 to buy a lot of 1,000 shares now, instead of NT$188,650 before the stock split.

In 2003, the ETF was listed on the local main board with an issuance price of NT$36.98. That was in line with a higher Taiex, the benchmark weighted index on the Taiwan Stock Exchange (TWSE) with price topping NT$200 at one point earlier this year.

Therefore, Yuanta Securities Investment Trust decided to split the stock to lower the purchasing threshold to allow smaller investors to own it more easily.

Since Yuanta Securities Investment Trust made an announcement of the stock split in mid-February, the number of investors of the ETF has increased rapidly. At the end of March, it topped 1 million for the first time, and rose further to 1.10 million currently.

The size of the ETF hit NT$451.9 billion when the stock split plan was publicized. Afterwards, the value surpassed the NT$500 billion mark for the first time at the end of April, and rose further to NT$660.2 billion currently, according to data compiled by the TWSE.

On Wednesday, the ETF rose 0.87 percent to close at NT$47.57 on the local main board, beating the Taiex, which gained 0.65 percent to end at 22,356.73.