Electronics Sell-Off Surges, Financial Holdings Hold Up Market
Hit by negative Google earnings, Taiwan stocks saw short-term selling pressure surge on the 29th, electronics were sold off, plunging nearly 1,000 points intraday. However, financial holding stocks held up the market, driving Yuanta MSCI Financial (0055) to 52.5, a new closing high. Amid October volatility, 0055 posted a gain of over 6%, leading gold-containing ETFs in performance.
October Gold-Containing ETF Race, 0055 Up 6.6% Tops Chart
Looking at gold-containing ETF performance since October, 0055 leads with a 6.6% gain, followed by Uni-President Taiwan High Dividend Momentum (00939), Fuh Hwa FTSE High Dividend Low Volatility (00731), SinoPac Excellent Dividend (00907) and Yuanta High Dividend Low Volatility (00713), up between 4.7% and 5.7%, showing financial-related ETFs remained resilient during market volatility.
Capital Gains and Spread Boost, Earnings Outlook Strong
Recent strength in financial stocks mainly benefited from capital gains from the bull market, as well as wider spreads driven by tight funding, boosting financial industry earnings, which are expected to challenge new highs, also making financial stocks a support force during recent Taiwan stock volatility. Since the rebound in global stocks from late July, 0055 is up 17.5%, compared with 7.9% for the TAIEX total return index over the same period; year-to-date, 0055 is up 64.3%, also above the TAIEX total return of 62.7%, with the two showing a golden cross.
Institutional Investors: Financial Stocks Not Just Catch-Up, Now Main Driver
Institutional analysis says 0055 components cover major Taiwan financial holdings, helping investors capture core financial targets in one investment. The financial industry also benefits from the AI growth trend, driving proprietary investment gains, securities brokerage business, bank deposit and loan business and fee income, so financial stocks are not just a catch-up play under fund rotation, but deeply participate in the market rally. Institutions further point out financial stocks have shifted from being seen as the last leg of a rally to an important force driving Taiwan market capitalization, with earnings support and reasonable valuation advantages. With strong Taiwan GDP growth this year and expectations for the 2027 outlook, the financial industry is expected to benefit from the economic upturn. Investors should pay attention to financial stock earnings performance and risk characteristics, and allocate assets through financial-related ETFs. Investment involves risks, please read the prospectus carefully before subscribing.