Taiwan Stock Market Plunges 4.65%, 'Taiwan Puyu Index' Falls Only 2.84%, Demonstrating Downside Protection

The Taiwan Weighted Index closed today (28th) with the third-largest point drop in its history, plunging 4.65%. In contrast, the 'Taiwan Puyu Index' declined only 2.84%, a significantly smaller drop than the overall market, demonstrating strong downside resilience and risk resistance. Further analysis of recent performance shows that from the market peak on June 22 to today, the Taiwan Puyu Total Return Index has delivered a cumulative return of -4.84%, outperforming the broader market's -12.24% over the same period. This highlights its ability to reduce downside pressure during market volatility and fully reflects the high-quality potential and investment value of its constituent stocks.

The 'Taiwan Puyu Index' by Taiwan Index Company focuses on high-quality, non-popular stocks. Constituents are selected based on positive EPS in each of the past three years and the most recent four quarters, along with three consecutive years of dividend payouts. The index excludes popular stocks ranking in the top 10% of the market in terms of trading value, volume, turnover rate, price appreciation, or volatility. It uses a market-cap weighting methodology, with constituent reviews conducted semi-annually in April and October.

According to the latest regular review, the index comprises 331 stocks, widely distributed across 31 listed industry categories. Based on data as of June 30, 81% of the constituents (including five from the Emerging Stock Board) rank in the top 50% of dividend yields among all listed stocks, with approximately 38% in the top 20%. The index demonstrates outstanding dividend yield performance.

Taiwan Index Company states that historical back-testing data shows the 'Taiwan Puyu Index' has consistently demonstrated strong resilience during multiple market downturns. Over the past five years, during the U.S. Federal Reserve's inflation and rate-hiking cycle from 2022 to 2023, the index's maximum drawdown was -14.28%, recovering in 83 days—outperforming the Weighted Index (-28.47%, 171 days). Starting in April 2025, amid U.S. government-imposed tariff hikes, the 'Taiwan Puyu Index' saw a maximum decline of -24.52%, again outperforming the Weighted Index's -27.72%. This confirms the index's superior resilience even under systemic risks. If successfully commercialized, it could offer investors a more diversified, resilient, and defensive investment option.