Rising Oil Prices and Inflation Fears Trigger Sharp Pullback in AI Stocks
Since October, the U.S.-Iran conflict has continued, oil prices have repeatedly hit new highs, inflation concerns have heated up, and the market has sharply raised expectations for U.S. Federal Reserve rate hikes, putting considerable pressure on the shares of high-growth, highly leveraged AI companies. During October 12-22, the U.S. Philadelphia Semiconductor Index fell 12.29%, optical communications maker Lumentum plunged 24.40%, Micron fell 13.40%, TSMC ADR fell 7.2%, and Nvidia fell 6.24%; for Taiwan AI stocks, Delta Electronics fell 19.59%, ASE fell 14.77%, and MediaTek fell 13.95%, with market-cap ETFs and active ETFs also posting sizable declines.
Telecom and Financials Hit New Highs Against the Trend, Expert Reveals Allocation
Warren, a dividend investor with 23 years of experience, noted that over the same period, telecom and financial stocks continued to hit record highs. He shared his own portfolio, with TSMC and AI ETFs accounting for about 42%, and consumer staples, telecom stocks and financial ETFs accounting for about 58%, and noted that in addition to telecom stocks, the Active Fuh Hwa Financial Dividend ETF (00998A) is worth watching. Warren said 00998A is Taiwan's first active ETF directly focused on the global financial industry, suitable for asset allocation, complementing technology stocks and providing stable cash flow.
Five Features of 00998A Highlighted, Balancing Offense and Defense
Warren summarized five features of 00998A. First, it acts as a shock absorber for AI stocks, with global financial stocks having a historical correlation coefficient of only about 0.58 with technology stocks; when high-valued technology stocks pull back, financial stocks can play a defensive and supportive role, with 00998A rising 1.06% during the sharp Taiwan market pullback from October 12-22, while 0050 fell 6.88%. Second, it is not limited to Taiwan financial stocks, holding more than 60 stocks covering banks, insurance and payments, without relying on a single country's interest rate policy. Third, a rising-rate environment favors financial stocks, as high interest rates can instead increase bank and insurer lending and investment income. Fourth, it adopts quarterly payouts, with distribution months in March, June, September and December each year, with the first distribution at 0.404 per unit and the second distribution in September rising to 0.424 per unit, with annualized yields above 9%. Fifth, overseas income offers tax advantages, with capital gains excluded from domestic personal consolidated income tax, while distributions are treated as overseas income and must be included in the alternative minimum tax. He stressed that for long-term dividend investing, going far matters more than going fast, and advised investors already holding large positions in market-cap or active ETFs to consider adding 00998A to balance risk.