## Don't Hesitate Anymore, High-Yield ETF in Taiwan Stocks Is the Solution to Your Investment Dilemma

In the current market volatility at high levels, many investors are caught in an age-old dilemma: should they continue chasing the rally in AI tech stocks, or shift to a stable income strategy? Data has already provided the answer.

Recently, as Taiwan stocks broke through a new high of 28,400 points, the capital flow revealed a completely different signal — among the most actively traded passive ETFs in Taiwan stocks over the past month, high-yield products occupied five spots, including Capital Securities Taiwan Select High Yield (00919), Cathay Sustainable High Dividend (00878), Fubon Select High Dividend 30 (00900), Yuanta High Dividend (0056), and Yuanta Taiwan Value High Yield (00940). This is not a coincidence, but a rational choice made by investors amid record highs.

## The Battle of Overseas ETFs Unveils the True Risks of AI Investment

To understand why Taiwanese investors are making these decisions, we need to look at what’s happening in the international markets.

Two large-scale ETFs in the US, each with over $10 billion in assets — iShares MSCI USA Quality Factor (QUAL) and Invesco S&P 500 Quality (SPHQ) — seem to pursue “quality companies,” but their stock selection logic has led to unexpected divergence.

SPHQ uses a key indicator: “Accruals,” which measures how much of a company's accounting profits have actually been converted into cash income. This seemingly technical indicator has caused SPHQ to exclude giants like NVIDIA, Meta, and Microsoft this year. The reason is straightforward — these companies’ accounts receivable are skyrocketing. For example, NVIDIA’s latest financial report shows a surge of $16 billion in accounts receivable, meaning that even with impressive sales figures, the actual cash has not yet been received, and the company needs to prepay large sums while waiting for customer payments.

In contrast, QUAL does not use this indicator and continues to heavily embrace tech giants. This has led to performance rollercoasters: when AI stocks soared, SPHQ temporarily led; but over the past six months, QUAL has significantly outperformed due to its heavy tech holdings.

This debate touches on the essence of investing — are the hundreds of billions of dollars that tech giants pour into AI future profit treasures, or cash flow black holes? When companies take on debt to invest and cash flow becomes tight, can the so-called “quality” halo still guarantee investment safety?

## How Taiwanese High-Yield ETFs Solve This Dilemma

Facing similar market concerns, Taiwanese high-yield ETFs adopt a relatively prudent approach. Take Capital Securities Taiwan Select High Yield (00919) as an example; its recent monthly increase of 2.33% not only outperformed the market but also maintained an estimated annualized dividend yield of over 10% for 11 consecutive quarters, making it a favorite among investors recently.

Fund manager Xie Mingzhi’s analysis provides a key clue: as the stock market has reached high levels, some funds are shifting from overhyped AI tech stocks to value stocks with reasonable valuations, stable operations, and dividend potential, especially financial stocks. Financial stocks still have room for profit growth amid the easing of interest rate cuts, and their dividend payout potential remains stable, becoming an important pillar to balance risk and return.

For example, 00919’s latest quarterly dividend remains at 0.54 yuan, with the ex-dividend date set for December 16. This long-term high dividend policy attracts a large amount of capital seeking a balance between dividends and growth. This “growth stock combined with value stock” allocation strategy not only pursues income but also captures price differences during market rotations.

## When Uncertainty Runs High, Cash Flow Becomes the Last Line of Defense

Why are more and more smart funds shifting to high-yield ETFs at market highs? BlackRock’s chief investment strategist Wei Li’s view is straightforward: the uncertainty brought by AI is too great, and the current business model of “spending now, expecting future income” has yet to be profit-verified.

Dimensional Fund Advisors’ research director Mamdouh Medhat offers a simpler investment philosophy: high-quality investments do not need to be overly complicated. Focus on companies with high profitability, reasonable valuations, and avoid those with excessive capital expenditure, and you can accumulate excess returns over the long term.

This is why many investors are no longer hesitating — instead of chasing “dream stocks,” they prefer to hold onto companies with high certainty of cash flow. As Taiwan stocks hit new highs, the capital flow says it all: high-yield ETFs are becoming stable assets in volatile markets.

Whether it’s the US debate over the definition of “quality,” or Taiwanese investors’ preference for income, they point to the same logic — in an environment of high uncertainty, companies with strong financial health, stable cash flow, and a willingness to reward shareholders are the true foundation of long-term investment. For investors, a basket of stable high-yield stocks can participate in market growth while reducing volatility risk — perhaps this is the smarter asset allocation choice right now.