Taiwan Stocks Surge Near 3,000 Points, Setting Record Highs as Investors Rush to Buy These Two 2x ETFs

On the last trading day of July, the Taiwan stock market rebounded strongly on July 31st, with the weighted index surging by 2,962 points once, approaching the 43,000-point mark. TSMC, the guardian of the nation, also surged by 195 yuan, reaching a high of 2,400 yuan, and both the market and TSMC set new records for the largest single-day gain in history. Driven by the strong performance of the market, leveraged 2x ETFs launched a full-scale attack. Among them, the Yuanta/P-TW ETF, which recently completed its split, surged by nearly 18%, with trading volume breaking 420,000 units. The Fubon Taiwan 50 2x ETF also surged by more than 17%, with trading volume reaching 400,000 units, becoming the focus of trading.

Looking back at the previous market trends, the Taiwan stock market experienced a sharp decline over three consecutive trading days, with a cumulative drop of 3,700.89 points and a decline rate of 8.48%. However, retail investors and institutional investors showed a strong willingness to buy on dips, and trading remained active. Statistics show that the top three trading volumes over the past three trading days were Yuanta 00685L, Active United Upgrade 50 (00403A-TW), and Fubon 00631L. Among them, 00685L topped the trading popularity for three consecutive days, and two out of the top three were taken by 2x ETFs, indicating that market funds showed a strong intention to bottom-fish during the correction period.

Analysts pointed out that 00685L completed a "1-for-24" split at the beginning of the month, becoming the most affordable Taiwan stock 2x ETF in the market. Leveraging the three advantages of "low unit price, high liquidity, and low management fee," it quickly rose to become the market's preferred haven and low-stakes layout during the market's shakeout. Currently, there are four Taiwan stock 2x ETFs in the Taiwan market, including Yuanta 00685L, Fubon 00631L, Cathay Taiwan Weighted 2x (00663L-TW), and Fubon Taiwan Weighted 2x (00675L-TW). Excluding 00675L, the other three have all completed their splits, with 00685L having the most affordable mid-market price.

Notably, the management fee rates of the four 2x ETFs vary significantly. The highest fee rate in the market reaches 1.0%, while the management fee for 00685L is only 0.3%, with a difference of more than three times. Analysts remind that the management fee is an internal deducted hidden cost, and its long-term accumulation has a significant impact on the return rate. Investors should not overlook this when selecting leveraged tools.

Looking ahead, the Yuanta Securities Taiwan Stock ETF research team stated that the long-term development trend of AI remains unchanged, and Taiwan stocks have the advantage of dual growth in earnings and capital. With a solid fundamental support, they maintain an optimistic outlook for the performance in the second half of the year.

Hong Xiangyi, the fund manager of 00685L, pointed out that the recent sharp market volatility is a "healthy correction" rather than a weakening of industry demand. Driven by the clear growth momentum of the technology sector and stable domestic demand, the medium- and long-term trend remains optimistic. However, Hong Xiangyi reminded that 2x ETFs have a "daily rebalancing" mechanism, and when the market declines, the asset shrinkage will double. Investors need to accurately assess their own risk tolerance.

*Disclaimer: The content of individual stocks, funds, and futures products mentioned in the text is for reference only and is not investment advice. Investors should make independent judgments, carefully assess risks, and bear the consequences of profits and losses.