Two years ago today, 700,000 people rushed to pour money into the 00940 ETF, raising NT$175.2 billion in five days. Today, the market price stands at NT$9.58, net asset value at NT$9.39—still below the NT$10 issue price. Including two years of cumulative dividends of NT$0.75, total return is approximately +3.3%. Over the same period, gold surged 107%, and Taiwan's flagship 0050 ETF, tracking the broader market, delivered an annualized return of 40.48%, nearly doubling with stock split adjustments.
Where Would That Money Be Now?
On April 1, 2024, gold was priced at $2,251 per ounce; today it's $4,683—a 107% gain. Simply holding a gold passbook would have yielded 32 times the return of 00940. The Taiwan Weighted Index climbed from about 20,400 points to 31,723 points, up 55%. The 0050 ETF underwent a 1-for-4 stock split and delivered a near-doubling total return.
NVIDIA rose 93.8% in the same period. Bitcoin, a fellow laggard, moved from about $69,700 to $66,510, down 4.3% but did hit an all-time high of $126,000 mid-cycle. 00940's story: dropped from NT$10 to NT$8.35, then crawled back to NT$9.58—still not recovered.
With a +3.3% two-year total return (annualized ~1.6%), 00940 barely beats Taiwan's one-year time deposit rates of 1.5%+. After fees and transaction costs, investors might have been better off leaving money in the bank.
530,000 Investors Exited
At its peak, 00940 had nearly 998,000 beneficiaries, the highest in Taiwan ETF history. Seniors lined up to break time deposits; young people tapped credit loans to join. Even central bank governor Chin-Long Yang warned of a "herd effect." A "00940 Self-Help Group" formed before listing, attracting over 10,000 members in three days.
Two years later, beneficiaries have shrunk to about 465,000—over 530,000 have cut losses or sold. Fund assets have dropped to NT$82.8 billion, still sizable but the luster is gone.
The structural flaw: Taiwan's rally above 31,000 was driven by TSMC, but 00940's value-dividend strategy naturally excludes low-dividend growth stocks like TSMC. The ETF ended up offering neither decent yield (monthly dividend once fell to NT$0.03, annualized yield below 4%) nor capital gains from the market surge.
00940 is not a bad product; the problem lies in why people bought it. Of the NT$175.2 billion raised, how many truly understood the "value high-dividend" strategy? How many jumped in because "NT$10 is cheap"? In a bear market, high-dividend strategies perform better.