What are ETFs?

Exchange-Traded Funds (ETFs) are designed to track specific market indexes, they combine the broad diversification of a mutual fund with the trading flexibility of a stock. At the most basic level, ETFs are just what their name implies: baskets of securities that are traded, like individual stocks, on an exchange (primarity the Taiwan Stock Exchange Corporation). Unlike regular open-end mutual funds, ETFs can be bought and sold throughout the trading day. They can also be sold short and bought on margin--in brief, anything you might do with a stock, you can do with an ETF. In Taiwan, the custodians of ETFs are fund houses and beneficiary certificates are issued as the certificate of the asset holdings.

For FB Technology, the TSEC, in cooperation with the FTSE, selected approximately 58 stocks (as of Jan, 2008) for compiling the TSEC Taiwan Technology Index. And for FB Technology, the TSEC and FTSE select top tier listed blue chips stocks with highest market capitalization and liquidity to compile the TSEC Taiwan Technology Index. TSEC Taiwan Technology Index reflects the competitiveness of Taiwan the IT industry, with a correlation ratio of 98.5% of the TAIEX.

  ETF Knowledge


ETFs = Indexes (track specific market indexes passively) + Stock (like individual stocks, on an exchange) + Mutual Funds