ETF 00940 marks its second anniversary since listing! It hasn’t yet risen back to its issue price of 10 yuan, but gold has already doubled.

Two years ago today (April 1), 700,000 people scrambled to stuff money into 00940, raising 175.2 billion over five days. Two years later, today the market price is 9.58 yuan, with dividend-inclusive return of +3.3%. During this time, gold is up 107%, 0050 is up nearly one time—so heartbreaking.
(Background: On Jan3, CEO Samson Mow urged the Legislative Yuan: Taiwan’s central bank should buy bitcoin reserves equal to 1% of GDP, and support ETF launches to get on track first)
(Additional context: Can this rebound in US stocks hold up? In the last day of Q1, stocks surged 3% to close, but they fell 5% over the month)

April 1, 2024, the first day that Yuan Taa Taiwan Value High Dividend ETF (00940) officially began trading—right then it dropped below its offering price of 10 yuan. A lot of people think it’s fine; just make it a long-term investment. Two years later today, the market price is 9.58 yuan, net asset value is 9.39 yuan, and it’s still stuck below the offering price.

If you run the numbers and add up the cumulative dividends of 0.75 yuan over these two years, the dividend-inclusive total return is roughly +3.3%. That 3.3% over two years doesn’t sound too bad by itself, but if you compare it with other ETF holdings, tech stocks, and gold, it really looks bad.

If the same pot of money had been put in different places two years ago, what would have happened

On April 1, 2024, the international gold price was about $2,251 per ounce. Today it closed at $4,683. A gain of 107%—more than doubling. If you just bought a single gold savings passbook and left it alone, the return would be 32 times that of 00940.

Back then, Taiwan’s weighted index was around 20,400 points; now it’s above 31,723 points, up 55%. The market is up half; if you had just bought an ETF tracking the broader market and stayed put, you would’ve been fine. Over these two years, 0050 also did a 1-for-4 split, and using an annualized return of 40.48%, the total return over the two-year holding period is close to 97%—almost doubling.

NVIDIA? It’s up 93.8% over the same period. Even if you don’t understand AI chips, just following along and buying Jen-Hsun Huang’s face gets you the win.

Bitcoin is indeed 00940’s fellow tragic case: two years ago it was about $69,700, and now it’s around $66,510—after crossing over a mountaintop it’s only slightly down by 4.3%. But bitcoin did surge to an all-time high of $126,000 in the middle, so at least there’s a story to tell. 00940’s story is falling from 10 yuan to 8.35 yuan, then slowly crawling back to 9.58 yuan—still not fully recovered.

With dividend-inclusive +3.3% over two years, the annualized return is about 1.6%. In the same period, Taiwan bank’s one-year time-deposit interest rate averaged at least 1.5%; after subtracting management fees and trading costs, buying 00940 may not be better than putting the money in a bank time deposit.

530,000 people ran away

In 00940’s early listing period, beneficiaries once nearly hit 998,000—an absolutely outrageous number in the history of Taiwan ETFs. The queuing aunties bought time deposits to snap it up; younger people even pledged credit to follow the trend. Even the central bank governor Yang Chin-lung showed up to warn about the “herding effect.” Before listing, there were already people who formed a “00940 self-rescue club,” with more than 10,000 members joining within three days.

Two years later, beneficiaries are down to about 465,000. More than 530,000 people have already cut their losses or stopped out and exited. At the time, the fund size shrank to 82.8 billion. It’s still a sizable ETF, but the halo is long gone.

The problem is in the structure. Over these two years, Taiwan stocks have been able to rise to over 31,000 points, and the biggest driver is TSMC. But 00940’s “value high-dividend” stock-selection strategy naturally won’t pick growth stocks like TSMC, which have relatively low dividend yields. TSMC has surged wildly; 00940 is watching from the sidelines. The result of “high dividend” means it neither captured enough dividends (monthly dividends once fell to 0.03 yuan, with an annualized dividend yield below 4%), nor did it keep up with the price gap versus the broader market.

00940 isn’t a bad ETF. Its issue has never been the product design itself. It’s the motivation of investors who bought it. Behind the 175.2 billion raised—how many people truly understand the “value high-dividend” strategy? How many people only rushed in because “10 yuan is cheap”? In fact, in a bear market for stocks, high dividends will have more value.

Happy birthday, 00940.

＊This article is for reference only and does not constitute investment advice. And it’s not meant to hurt 00940’s investors—everyone can just laugh it off.