Do 00878 and 00919 Outperform 0050? Insider Analysis: High-Dividend ETFs Face '3 Major Crises'

Taiwan's stock market resilience is not only due to AI fundamentals but also to the buying of high-dividend ETFs on dips. Listed blue-chip stocks are heavily weighted by ETFs, with a significant difference in ETF holdings between listed and OTC stocks. This structure poses the risk of a 'death spiral' from ETF redemptions in the future.

The reason Taiwan's stock market remains resilient despite international declines is due to Taiwan's dominance in AI server outsourcing, with a 90% global market share, and the buying of high-dividend ETFs. In particular, ETFs such as Cathay PE High Dividend (00878) and Yuanta Taiwan High Dividend (00919) are supporting component stocks like Quanta Computer (2382).

However, the concentration of ETF holdings poses a risk of excessive influence on individual stocks such as CTBC Financial (2891) and Quanta Computer (2382), threatening market stability. In particular, if ETF redemptions occur, these stocks could face significant selling pressure.

Additionally, market-cap-weighted ETFs such as Yuanta Taiwan 50 (0050) and actively managed ETFs like Uni-President Taiwan Growth (00981A) are also gaining investor trust, supporting the market. However, concentrated ETF holdings also increase market vulnerability.

In the future, risks such as ETF redemptions and structural market issues could become significant challenges for Taiwan's stock market.