How to Choose Between Fubon and Nomura High Dividend ETFs? 2025 In-Depth Comparison and Comprehensive Guide to Taiwanese High Dividend Recommendations
In today’s pursuit of stable passive income, high dividend ETFs have become the top choice for many investors. However, with numerous high dividend ETFs in the market, such as Fubon High Dividend (00730), Nomura High Dividend (00713), and other Taiwanese high dividend options, how do you decide? This article will deeply analyze and compare these popular ETFs, explaining the selection criteria for high dividend ETFs and the key knowledge regarding ETF dividend payouts, helping you find the investment product that best suits your needs.
In-Depth Comparison of Fubon High Dividend (00730) and Nomura High Dividend (00713)
Among Taiwanese high dividend ETFs, Fubon High Dividend (00730) and Nomura High Dividend (00713) are undoubtedly the two major focus points. They each have their unique strengths, and it’s crucial for investors seeking stable dividend payouts to understand the differences between them. Below, we will provide a comprehensive comparison based on stock selection logic, component stocks, risk characteristics, dividend payout frequency, yield, and historical performance.
Differences in Stock Selection Logic, Component Stocks, and Risk Characteristics
The differences in the performance of the two ETFs mainly stem from the stock selection logic of the indices they track. This not only affects the composition of the components but also directly impacts their risk exposure and return potential in various market environments.
- Fubon Taiwan Quality High Dividend (00730):
00730 tracks the “Taiwan Index Company Selected Taiwan Premium High Dividend Index”. Its stock selection logic focuses on two main aspects: “dividend yield” and “profitability“. It excludes stocks with significant past price volatility to control risk. The component stocks are adjusted annually based on actual dividend payout performance, aiming to include companies with consistent dividend-paying capabilities. As a result, 00730 can effectively capture high dividend yields during periods of stable economic conditions and strong corporate profitability. However, in times of market volatility or specific industry cycles, its stock selection criteria may lead to concentration in certain traditional industries or large-cap companies, which could increase volatility.
- Nomura Taiwan High Dividend (00713):
00713 tracks the “Selected Taiwan High Dividend Return Index”. Its stock selection strategy is more diversified, considering not only “high dividend yield” but also “profitability“, “price volatility“, and “operating cash flow“, among other financial metrics. Nomura High Dividend emphasizes “total return”, seeking to balance both dividend income and potential stock price growth. This multi-factor stock selection characteristic results in a more diversified portfolio across different industries, with more frequent adjustments to the holdings. This aims to provide a more balanced investment portfolio that can remain resilient in various market conditions and reduce the risk concentration from single stocks or industries.
Risk Characteristics From a risk perspective, 00730, which focuses more on high dividend yield in the short term, may face larger shocks during market style changes. On the other hand, 00713, through multi-factor selection and incorporating growth considerations, can more effectively resist single market risks, providing a more stable investment experience. Investors should weigh their own risk tolerance and investment goals when making a decision.
Dividend Frequency, Yield, and Historical Performance Analysis
The dividend frequency and yield of an ETF are key points of focus for many investors, while historical performance provides an important reference for assessing future potential.
- Dividend Frequency and Yield:
00730 typically distributes dividends semi-annually, but the actual frequency depends on the fund’s conditions. Its yield performance tends to fluctuate based on the dividend policies of its constituent stocks for the year, but over the long term, it remains relatively high. 00713 distributes dividends quarterly, offering a higher frequency, allowing investors to receive dividends more often. Due to its more robust stock selection logic, its dividend payouts are generally more stable, and its yield performance typically ranks in the top tier of the market. For investors seeking consistent cash flow, the quarterly dividend feature of 00713 is more attractive.
- Historical Performance:
Looking at past performance, 00713 has generally shown stronger “total return” performance, especially during market style shifts or periods of high volatility, where its multi-factor stock selection strategy provides some protection. 00730, however, may experience a spike in yield during certain years if its holdings perform exceptionally well. However, investors must understand that past performance is not indicative of future results. When selecting, it’s important to consider the fund manager’s strategy, market environment, and personal investment horizon.
In summary, if you prefer frequent dividends and seek relatively stable total returns, 00713 may be more suitable. If you’re more focused on higher annual ETF dividend yields and can tolerate volatility, 00730 is worth considering. It’s important not to focus solely on the yield of a single year but to examine the long-term stability of dividends and the fund’s ability to fill in dividends.
Taiwan High Dividend ETF Recommendations: How to Choose and Understand the Dividend Mechanism
In addition to Fubon High Dividend and Nomura High Dividend, there are many other high-quality Taiwanese high dividend ETFs worth exploring. Choosing the most suitable high dividend ETF requires a comprehensive set of criteria, not just focusing on the yield.
How to Choose the Right High Dividend ETF for You? Key Indicators and Tax Considerations
Selecting a high dividend ETF is an art. The following key indicators can help you make a more informed decision:
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Stock Selection Logic Transparency:
Understand how the ETF tracks its index and selects component stocks. Does it simply focus on high dividend yield, or does it also consider profitability, growth, volatility, and other factors? A clear stock selection logic helps in predicting future performance.
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Expense Ratio:
Management fees, custodial fees, and other internal costs can directly erode your investment returns. Choosing ETFs with lower expense ratios ensures higher actual returns on your investment. You can refer to the Fubon Investment website for detailed information on related expenses.
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Tracking Error:
This measures the difference between the ETF’s return and the return of its tracked index. A smaller tracking error indicates that the ETF is better at replicating the index’s performance.
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Liquidity:
Check the trading volume and size of the ETF. ETFs with good liquidity have smaller bid-ask spreads, making it easier to enter and exit the market.
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Dividend Fillability:
After the ETF pays dividends, its stock price typically drops. The ability of the ETF to recover the ex-dividend gap in a short time is a key indicator of its real returns. If the price doesn’t recover, the dividend is essentially just a transfer between accounts without any actual profit.
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Tax Considerations:
In Taiwan, ETF dividends are subject to “dividend income”, which may require you to pay additional health insurance premiums and be included in your personal comprehensive income tax calculation. For investors receiving substantial dividends, it’s important to pay attention to tax planning. For instance, using personal tax-free allowances or considering investing in ETFs with different dividend payout months can help reduce the tax burden. Understanding relevant tax regulations is crucial when investing in high dividend ETFs.
By considering these indicators, investors can select the most suitable high dividend ETF based on their fund size, investment goals, risk tolerance, and cash flow needs. Remember, there is no “best” ETF, there is only the ETF that is best suited to your personal needs.
Frequently Asked Questions (FAQ)
Q: Are high dividend ETFs suitable for beginner investors?
A: High dividend ETFs are generally considered a relatively suitable investment tool for beginners. They offer benefits such as diversified risk, ease of operation, and low entry barriers. Through ETFs, beginners can invest in a basket of stocks indirectly without spending a lot of time researching individual stocks, and still enjoy dividend income. However, beginners should understand that high dividend ETFs do not guarantee profits, and are still subject to market fluctuations. It is also important to pay attention to their stock selection logic and dividend fillability. Beginners are advised to start with ETFs that have low expense ratios, good liquidity, and solid historical records.
Q: Are high dividend ETF dividends taxed?
A: Yes, high dividend ETF dividends in Taiwan are subject to taxation. There are two main parts to this tax:
1. Second-generation Health Insurance Supplement Premium: If the dividend amount reaches a certain threshold (currently NT$20,000), it will be subject to withholding tax.
2. Personal Comprehensive Income Tax: Dividend income is included in personal comprehensive income tax. You can choose between “consolidated taxation” or “separate taxatio”, and the tax rate will depend on your income bracket. It is recommended that investors consult a professional accountant or refer to the National Tax Bureau’s information to understand the detailed tax regulations and plan for reasonable tax savings.
Q: Besides yield, what else should I consider when choosing a high dividend ETF?
A: In addition to yield, you should also pay attention to the following factors when selecting a high dividend ETF:
1. Stock Selection Logic: Understand whether the ETF solely pursues high yield, or incorporates factors such as profitability, growth, and volatility.
2.Dividend Fillability: Check the ETF’s past ability to recover dividends. If the dividend is not filled, it means the dividend is paid back from the capital, rather than actual profit.
3. Expense Ratio: Internal fees can affect long-term returns.
4. Size and Liquidity: Larger ETFs with better liquidity usually have lower transaction costs and are less likely to be at risk of delisting.
5. Industry Allocation: Review the ETF’s industry diversification to avoid overconcentration in a single industry, which can reduce risk.
Q: How can I create stable passive income through high dividend ETFs?
A: To create stable passive income through high dividend ETFs, the key lies in “long-term holding” and “reinvestment”. You can choose ETFs with monthly or quarterly dividend payouts to establish a steady cash flow. More importantly, reinvest the dividends you receive to accelerate asset accumulation through compound interest. Additionally, diversifying your investment across multiple high dividend ETFs with different stock selection logic and dividend payout months can further stabilize cash flow and reduce volatility risk, making your passive income more secure.
Summary
High dividend ETFs are an effective tool for building passive income, but understanding the characteristics of different ETFs, their stock selection logic, and dividend mechanisms is crucial. This guide, comparing Fubon High Dividend, Nomura High Dividend, and other Taiwanese high dividend ETFs, along with high dividend ETF recommendations, aims to help you make smarter investment choices and achieve steady ETF dividend income. Take action now to grow your wealth!
