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
