Taiwan Index Plus Corp. (TIP, 台灣指數公司), a wholly owned subsidiary of the Taiwan Stock Exchange (TWSE), is encouraging investors to follow a newly- launched index containing 30 blue chips to rake in more profits.
The TIP launched the TIP TAIEX+ Blue Chip 30 Index last week, focused on the 30 largest cap stocks in the local equity market with sound fundamentals, good bottom lines and stable operations.
According to the index provider, the top 10 stocks among the 30 blue chips in terms of market capitalization include contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), the most heavily weighted stock in the local market, followed by telecom operator Chunghwa Telecom Co. (中華電), Nan Ya Plastics Corp. (南亞), Formosa Plastics Corp. (台塑) and Cathay Financial Holding Co. (國泰金).
Fubon Financial Holding Co. (富邦金) came sixth in the blue chip index ahead of integrated circuit designer MediaTek Inc. (聯發科), power supply management solution provider Delta Electronics Inc. (台達電), telecom operator Taiwan Mobile Co. (台灣大) and smartphone camera lens maker Largan Precision Co. (大立光).
Financial stocks account for 47 percent of the firms on the index, the electronics sector 43 percent and the old economy sector 10 percent, the TIP said.
In addition to the healthy fundamentals in earnings and operations that have earned these blue chips a good reputation in business circles at home and abroad, the TIP noted that the 30 blue chips are highly liquid, making it easier for investors to find buyers if necessary. The index provider said that the blue chip 30 index is expected to serve as an indicator for investors who want to improve their investment portfolio in the local equity market.
According to the TIP, the 30 blue chips covered recorded an aggregate investment return of 134 percent over the past 10 years, surpassing the 97 percent return posted by the benchmark weighted index on the local main board and the 95 percent return of the FTSE TWSE Taiwan 50 Index, which is comprised of the largest 50 cap stocks in Taiwan.
In addition, the blue chip index posted 19 percent in the annualized standard deviation which measures market volatility, lower than the 20 percent on local main board and 21 percent registered by the Taiwan 50 index over the past 10 years. The data indicates that the blue chip index should offer investors a better return with lower risks, the TIP said.
Source: Focus Taiwan News Channel