Hot Stock: TSMC Rises to Limit Up Rarely Seen, 00631L Soars 18.75% in a Day to Dominate Entire Market

On July 31, the Taiwan stock market recorded its largest point gain in history, with electronics heavyweight stocks fully recovering. TSMC closed at limit up—the third time in nearly six years—while 2x bull ETFs performed even more impressively, all surging over 18%. Notably, Yuanta Taiwan 50 Bull 2X (00631L-TW), which holds the highest weighting in TSMC, led the market with an 18.75% gain.

Looking at the list of top gainers in the Taiwan market, the top four positions were entirely occupied by 2x Taiwan stock ETFs. 00631L ranked first with an 18.75% increase, followed by Cathay Taiwan Weighted Bull 2X (00663L-TW), Fubon Taiwan Weighted Bull 2X (00675L-TW), and Capital Taiwan Weighted Bull 2X (00685L-TW), with gains ranging between 18.33% and 18.23%.

Institutional analysts attribute this market rebound to multiple overlapping factors such as Korea's deleveraging and Middle East geopolitical tensions. However, Taiwan's fundamental economic outlook remains solid. The Ministry of Economic Affairs emphasized that Taiwan's AI supply chain continues to secure strong orders, describing its trajectory as 'stable and sustainable.' After digesting negative news, large-cap stocks naturally led the market recovery. During bullish periods, 2x leveraged ETFs tend to exhibit even stronger upward momentum.

The standout performance of 00631L stems from its strategic move to closely track twice the positive performance of the Taiwan 50 Index by increasing holdings in heavyweight TSMC (2330-TW). According to the purchase-redemption schedule of 00631L on July 30, it held 41.73% in physical shares of TSMC and 158.27% in Taiwan Index Futures, resulting in a total TSMC exposure of approximately 120.26%. This is nearly double TSMC’s weight in the Taiwan 50 Index, making it the Taiwan-listed product with the highest 'TSMC content' in the market.

Amid this sharp market correction, TSMC, often called the 'national guardian mountain,' continued to demonstrate resilience, contrasting sharply with SK Hynix and Samsung Electronics at the epicenter. It played a crucial stabilizing role in the broader market. Statistics show that since July, the Taiwan Weighted Index has declined only 6.5%, less than both Japanese and Korean markets.

Supported by TSMC, 00631L fell only 12.3% during the same period, outperforming other major index 2x ETFs such as 00685L and 00663L, which dropped around 15%. As the market entered a rebound phase, it further benefited from leadership by large-cap stocks. As of July 30, over the past six months, one year, and two years, 00631L delivered returns of 40.6%, 159.9%, and 167.3%, respectively, surpassing 00685L’s 39.4%, 157.7%, and 165.2%, and ranking first among all Taiwan 2x bull ETFs.