Market Plummets, But Retail Investors Unfazed by Low-Volatility ETF's Resilience

Taiwan's stock market plunged nearly 3000 points on July 17th amid escalating US-Iran tensions and a downturn in Japanese and South Korean markets. While many ETFs saw steep declines of 6-8%, the Yuanta Taiwan High Dividend Low Volatility ETF (00713) emerged as a standout performer, resisting the broader market's fall and even briefly turning positive intraday. Retail investors humorously noted they "didn't feel the market crash," as 00713 closed with only a 1% loss.

Institutional investors attribute 00713's resilience to its distinct investment strategy. Unlike other high-dividend ETFs, it selects mid-to-large cap companies from the Taiwanese stock market that exhibit both high dividend yields and low volatility. The ETF's current significant holdings include companies in the telecommunications, finance, and domestic consumption sectors, such as Taiwan Mobile (3045), Far EasTone (4904), Uni-President Enterprises (1216), President Chain Store (2912), and Hua Nan Financial Holdings (2880), chosen for their dividend potential and stability.

Furthermore, 00713's low volatility is achieved by managing the correlation between its holdings' stock price movements, thereby minimizing the risk of synchronized declines. Data from Morningstar shows that as of June 2026, 00713 had the lowest volatility among Taiwan large-cap equity funds over the preceding three years. Analysts suggest that investors can utilize 00713 as a stable component in their portfolio, providing regular income while also serving as a base for increasing exposure to leveraged ETFs or for margin lending during market downturns, effectively allowing for strategic buying at lower prices.