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Exchange Traded Funds(ETFs)

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Upgraded Foreign Stocks /ETFs services
Foreign Stocks /ETFs order via phone banking is now available until 24:00.
  • If you need any related services, please contact your relationship manager during our business hours.

  • Exchange Traded Funds (ETFs)

Exchange Traded Funds (ETFs)

Low cost

In comparison with actively-managed mutual funds that frequently adjust investment portfolios in general, ETFs tend to adopt a buy-and-hold strategy and only change along with the adjustment of the constituent composition of the underlying index, which leads to comparatively lower trading costs for investment conversion without additional payment for investment research and analysis

Diversification

An investment portfolio of an ETF contains major constituents of the underlying index, which not only saves investors the trouble of selecting stocks, but also avoids the risks arising from investing in individual stocks

Transparency

ETFs reflect the return of the underlying indices. All relevant information are public and transparent, and all information including details of investment products held by ETFs can be accessed on public websites, allowing investors to comprehend and access information with ease.

Flexibility

Investors can trade on the open market on business days of the ETF-listed stock exchange through a non-discretionary money trust. Investment strategies are flexible.

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Investment Risk Disclosure

  1. Systemic risk: Even though ETFs are passive investments in a diversified portfolio, which helps alleviate non-systemic risk and stock-selection risk, they still carry the risk from the entire market
  2. Local market risk: The Trustor shall understand the product is traded in foreign securities markets and transactions are conducted in accordance with local laws and the rules of the local exchange, which may differ from the R.O.C. Securities and Exchange Act. The investor must understand the product’s actual trading time at its exchange may be different from that in Taiwan. Therefore, once a transaction is confirmed, it cannot be cancelled, and the investor must tolerate all local market risks.
  3. Price volatility risk: The Trustor must understand the product’s market trading price is subject to huge fluctuations and there is no upper and lower limits on price movements. Consequently, it is possible to lose all principal at maximum. In addition, the trading prices may not be the net values announced by the fund management company; instead, they may be higher or lower than the net values announced by the fund management company.
  4. Exchange rate risk: If a product is denominated in a foreign currency, and the investor invests in it using TWD or currencies other than the one in which the product is denominated, the investor shall pay heed to possible exchange rate risks arising from the conversion of currency into TWD or the original currency upon dividends payout or redemption of invested amount.
  5. Correlation risk: The investment goal of ETFs is to pursue the performance of underlying indices before the deduction of funds-related expenses. Movements of ETFs may be closely related to movements of underlying indices tracked; however, high correlation is not guaranteed. Factors affecting the correlation include trading costs, investment methodology, asset scale and liquidity, dividends, commissions, charges, conversion costs, relevant income, and accounting standards, which may cause inconsistency of performance between ETFs and tracking indices.
  6. Credit risk: Negative impacts imposed on the performance of ETFs when the issuers or guarantors, counterparties, and investment underlyings of ETFs cannot pay interest or principal due to a credit default..
  7. Liquidity Risk: The liquidity of this product may be insufficient or partially traded due to other factors, which may result in price risk and market risk, and the risk of being unable to sell the product because the number of shares held is less than the minimum requirement for the number of shares sold, there is a risk that the product cannot be sold.
  8. Fund liquidation risk: If the fund’s net asset value falls below the required minimum net asset value on any specific valuation day, the fund management company will sell all assets held to proceed with liquidation. The Trustee will notify the Trustor after receiving the relevant information, and deal with relevant affairs appropriately based on the trust account agreement between the Trustee and the Trustor.
  9. Taxation risk: The Trustor shall pay taxes upon payment in accordance with relevant taxation. Should taxation laws change afterwards, the investor shall pay taxes in accordance with relevant taxation laws. The return on investment may be different from expectations at the time of subscription.
  10. Other Risks: The risks associated with other ETFs are detailed in the fund prospectus and investors should refer to the relevant explanatory notes before subscribing.
  11. For product-related fees charging, please refer to “Account opening master agreement. ”under “Regulatory Risk Disclosure Statement” and “Standard form contract “.