Electronics stocks drop under pressure as financial holdings support the market
Hit by negative news from Google's earnings report, Taiwan stocks saw short-term selling pressure on 10月29日, with electronics stocks facing sell-offs and intraday losses of nearly 1,000 points. Amid sharp market volatility, financial holding stocks played a stabilizing role, as Yuanta MSCI Financial (0055) rose to 52.5元, setting another record closing high, becoming the focus of market resilience and bringing financial stocks back into market focus.
Interest spreads and capital gains boost earnings outlook
The recent strength in financial stocks was mainly driven by capital gains from the bull market and wider interest spreads amid tight funding conditions, supporting financial earnings momentum with room to challenge new highs. In the volatile market in 10月, 0055 delivered a gain of over 6%, leading gold-related ETFs, and financial stocks became an important force supporting Taiwan stocks, offsetting some of the pressure from electronics declines.
October gold-related ETF race: 0055 leads with 6.6% gain
Looking at gold-related ETF performance since 10月, 0055 led with a 6.6% gain, followed by Uni-President Taiwan High Dividend Momentum (00939), Fuh Hwa FTSE High Dividend Low Volatility (00731), SinoPac Superior Dividend Stock (00907) and Yuanta High Dividend Low Volatility (00713), with gains ranging from 4.7% to 5.7%. Overall, financial-related ETFs still showed resilience during market volatility, with relatively defensive performance.
Up 64.3% this year, beating the broader market; institutional investors see allocation advantages
Over a longer period, since the global stock market rebound in late 7月, 0055 has gained 17.5%, compared with a 7.9% total return including dividends for the TAIEX. Year-to-date, 0055 is up 64.3%, higher than the 62.7% total return including dividends of the TAIEX, with a golden cross between the two, showing financial targets have outperformed the broader market this year.
Institutional analysis notes that 0055 covers Taiwan's major financial holdings, helping investors capture core financial targets in one investment. The financial industry has also benefited from the AI growth trend, driving proprietary investment gains, securities brokerage business, bank deposit and lending business, and fee income, making it no longer just a catch-up play on capital rotation, but a deep participant in the market rally. Institutions further point out that financial stocks have shifted from being seen as the last leg of a rally to an important force lifting Taiwan's market capitalization, with earnings support and reasonable valuations as allocation advantages. With strong Taiwan GDP growth this year and expectations for the 2027年 outlook, the financial industry is expected to benefit from the economic upturn. Investors may watch financial earnings performance and risk characteristics, and allocate assets through financial-related ETFs. All investments involve risks; please read the prospectus carefully before subscribing.