ETF Chart of the Day: Taiwan

December 8th at 10:15am by Paul Weisbruch, Street One Financial

We noticed bearish put buyers in EWT (iShares Taiwan) that surfaced on Wednesday in the options market, as investors seem to be expressing caution about this country specific exchange traded fund going into year’s end.

EWT has notably lagged EFA (iShares MSCI EAFE) year to date, falling 23.17% versus EFA down 12.83% and the ETF remains below its 50 day moving average ( which is $12.51 a share currently) and significantly below its 200 day moving average (which is $14.11 currently).

EWT is one of two ETFs that focus on the Taiwanese equities market, with top holdings including Taiwan Semiconductor, Hon Hai Precision, HTC Corporation, Chunghwa Telecom, and Mediatek Inc.

A relative newcomer to the space is TWON (IndexIQ Taiwan Small Cap), which debuted in mid- 2010. Unlike the large cap focused EWT, TWON grants exposure to small cap names that are based in Taiwan.

Both EWT and TWON invest in ordinaries (shares listed on the local exchange) and not ADRs. TWON, which should be expected to be more volatile than EWT due to its small cap nature, has lagged as well this year, down 31.69% and trading near its lows since the product’s inception.

IndexIQ Taiwan Small Cap

For more information on Street One ETF research and ETF trade execution/liquidity services, contact pweisbruch@streetonefinancial.com.

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