I’m not an ETF investor, but this article does an awesome job laying out Taiwan’s ETF scene, especially how big these high-yielders are as a slice of a company’s free float. It’s wild to see that a share price bump can kick a stock out of an index (and a slump can force it back in), purely because of some rulebook rather than fundamentals.
That dynamic creates real market quirks: forced buying or selling that has nothing to do with a company’s true value. For active investors, those distortions are gold for capturing alpha, whether you’re swooping in on the “dumb” sell-offs or riding the rebound.
"Taiwan’s addition 5% profit retention tax on any earnings not distributed by the end of the following year". I have often wished for a similar regulation here in the US. As long as such a tax exempts earnings
that are invested in R&D or actual capital purchases, it discourages the phenomenon of some companies behaving more like banks with some other business on the side.
Agree. It goes a long way to instill capital discipline in the company
I’m not an ETF investor, but this article does an awesome job laying out Taiwan’s ETF scene, especially how big these high-yielders are as a slice of a company’s free float. It’s wild to see that a share price bump can kick a stock out of an index (and a slump can force it back in), purely because of some rulebook rather than fundamentals.
That dynamic creates real market quirks: forced buying or selling that has nothing to do with a company’s true value. For active investors, those distortions are gold for capturing alpha, whether you’re swooping in on the “dumb” sell-offs or riding the rebound.
"Taiwan’s addition 5% profit retention tax on any earnings not distributed by the end of the following year". I have often wished for a similar regulation here in the US. As long as such a tax exempts earnings
that are invested in R&D or actual capital purchases, it discourages the phenomenon of some companies behaving more like banks with some other business on the side.