Taiwan's only crypto concept fund "Cathay Digital Payment Services ETF": What are its constituent stocks, dividend distribution, and is it worth buying?

Since the SEC passed 11 Bitcoin spot ETFs in January this year, net capital inflows have exceeded US$12.5 billion in less than five months. However, since the Taiwan Financial Supervisory Commission prohibits people from buying Bitcoin ETFs through Taiwanese securities firms through multiple commissions, operations can only be carried out through overseas securities firms.

But you know what? In fact, there is also a cryptocurrency concept fund in Taiwan, which is the " Cathay Global Digital Payment Service ETF Fund " launched by Cathay Securities in mid-2022 (abbreviation: Cathay Digital Payment Service, stock code 00909).

Because its component stocks include stocks related to the blockchain and cryptocurrency industries, the fund benefited from Bitcoin's multiple record highs in the first quarter. The fund once rose above the record high of 30 yuan on March 27, and the downward trend zone brought Come and get to know this fund.

Cathay Digital Payment Services ETF constituent stocks

According to the official statement, the Cathay Digital Payment Services ETF (00909) tracks the Solactive Global Digital Payment Services Index and selects listed stocks from developed countries (including Taiwan and South Korea, excluding China) with a market value of at least US$200 million and which have a market capitalization of at least US$200 million in the past three years. Companies with a monthly average daily trading volume of more than US$3 million.

According to Macromicro data , among the current top ten holdings of 00909, there are several key companies that the crypto often pays attention to. The rankings are:

1. MicroStrategy (9.41%) : MicroStrategy is essentially a business intelligence software provider, but the company's CEO Michael Saylor is an advocate of Bitcoin, so MicroStrategy is now the listed company holding the most Bitcoins, with as many as 214,400 .
2. Robinhood Markets (6.83%) : An American financial technology company founded in 2013, it provides commission-free stock and cryptocurrency trading services through apps and websites, aiming to make it easy for more people to invest and manage assets.
3. NVIDIA (6.8%) : NVIDIA is the world's leading manufacturer of graphics processing units (GPUs). In addition to being widely used in the field of artificial intelligence, many cryptocurrency mining machines also use NVIDIA's chips.
4. Coinbase (6.72%): The largest cryptocurrency exchange in the United States
5. Block Inc. (5.04%): Formerly known as Square, in addition to its main payment business, it also provides Bitcoin transaction services through its subsidiary Cash App. The company’s founder, Jack Dorsey, is a loyal supporter of Bitcoin.
6. …

00909 Interest rate, is it worth buying?

00909 has distributed dividends twice since its listing in 2022/7

• The first dividend is 0.23 yuan, and the annualized yield is 1.33%.
• 2024/4/18 The second dividend distribution is 1.81 yuan, with an annualized yield of 6.85%

In total, although this ETF has screened out companies related to the "digital payment theme", there are a total of 30 constituent stocks, including companies related to the blockchain and cryptocurrency industries.

But if you are really interested in investing in cryptocurrency, the return rate of choosing this fund may not be more beneficial than simply holding tokens such as BTC or ETH. After all, this fund also mixes in many other traditional payment companies.

Without taking into account interest distribution and handling fees (management fee + annual fee of about 1%), 00909 writes that the current price is 25.56 yuan, an increase of nearly 14% since the beginning of 2024. Although the performance is not bad, compared with BTC so far this year With an increase of more than 60%, it is not considered a very good investment target.

Will Taiwan allow re-entrustment to buy overseas Bitcoin ETFs?

In the future, whether Taiwanese investors can re-entrust the purchase of overseas Bitcoin ETFs through Taiwanese securities companies is still subject to further discussion by the Financial Supervisory Commission. Chairman Huang Tianmu has previously stated that virtual assets have no intrinsic value, but are highly volatile. He has asked the Securities Dealers Association to study the feasibility of entrusting a spot ETF to include Bitcoin before the end of April, but there has been no relevant update yet.

Will Taiwan even allow the establishment of cryptocurrency-related ETFs in the future? It remains to be seen further...