Nearly 3,000-point pullback in three weeks heats up defensive demand
Taiwan stocks have seen volatility intensify recently, with the Weighted Index pulling back nearly 3,000 points from its high, and investors are focusing not only on rebound opportunities but also on reducing asset volatility. Financial expert Chip Guy Ge observes that when the market rises, the higher the equity position, the faster profits tend to grow, and few people pay attention to defense; but facing the sharp correction over the past 3 weeks, market focus has shifted to declines in holdings on hand and how much of prior gains have been retained. He says he is still buying stocks incrementally with an unchanged long-term view, but the longer he invests, the more he values being able to keep profits.
0050 falls about 7.88%, 00981T falls only about 0.42% on an inclusive-dividend basis
Chip Guy Ge points out that Taiwan stocks had previously risen sharply, and even after the pullback the index remains relatively high, leaving many investors torn between a bullish long-term outlook and fear of buying at the top, which has also drawn attention to relatively defensive ETFs. He notes that during the correction over the past 3 weeks, the established market-cap ETF 0050 fell about 7.88%, while the KGI Dual-Core Income Bond-Stock Balanced ETF 00981T posted an inclusive-dividend return decline of only about 0.42% after including distributions. Their allocations differ, so they cannot be directly compared, but the gap in declines reflects asset-allocation differences; in good markets a balanced stock-bond fund is less eye-catching, while volatility performance may diverge during corrections.
70% bonds plus 30% Taiwan stocks, deployed in US-dollar corporate bonds
The gap mainly stems from 00981T's 70% bonds plus 30% Taiwan stocks allocation, with only 30% of funds invested in large-cap Taiwan權值 stocks and the other 70% mainly in US-dollar corporate bonds issued by companies in developed markets worldwide, with investment-grade rating requirements. Industry coverage includes financials, telecom, technology, energy, materials and other sectors, with component bonds covering corporate bonds issued by large companies such as Boeing, MetLife, and Dow. The overall approach is to lend funds to different companies in a diversified way to earn bond interest, rather than moving entirely with Taiwan stocks. Compared with being fully invested in equities, 30% Taiwan stocks paired with 70% corporate bonds helps diversify funds across different assets.
Distribution raised to 0.082 yuan, single payout annualized at over 8%
On distributions, 00981T's per-unit payout rose from 0.054 yuan to 0.057 yuan, 0.065 yuan and 0.071 yuan, and recently has held at 0.082 yuan, translating to a single-payout annualized distribution rate of over 8% based on the latest payout. Chip Guy Ge concludes that he will continue to look for stock investment opportunities, but the higher the market level, the less necessary it is to put every dollar fully into stocks; investors can allocate growth assets, hold cash, or add bonds as appropriate based on risk tolerance. Amid volatility, balancing growth opportunities, controlling volatility, and preserving accumulated gains deserves equal attention.