Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
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The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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| MSCI
Taiwan iShares (EWT) |
Published: August 23, 2004
The iShares MSCI Taiwan Fund (EWT) is an international
exchange-traded fund (ETF) that holds a basket of 104 companies and is
meant to represent the movement of the Taiwanese Stock Market.
If it's an international ETF, then it must be a Morgan Stanley Capital
International (MSCI) fund, as the company publishes numerous
international indices. There are a few non-MSCI international funds, but
the sum total of their average daily volume amounts to less than 350,000
shares. (By comparison, EWT has averaged more than 400,000 shares traded
per day this year.) All of the single country specific ETFs are based on
MSCI indices.
The Taiwanese currency is pegged to the U.S. dollar (USD). Because of
this, fluctuations in the exchange rate are not an issue when it comes
to this fund's returns. Of course, there is always risk that Taiwan
could revalue (increase the value) or devalue (lower the value) its
currency. In the first case, that would be bullish for EWT in dollar
terms, as it would mean that U.S. investors would get more dollars for
their current holdings. The second case would have the opposite effect.
However, neither event is likely in the foreseeable future.
Interestingly, the MSCI Taiwan iShares are not highly correlated with
the MSCI Hong Kong iShares (EWH). The correlation between the two funds
is just 56%, which is well under EWT's 61% correlation with the Nasdaq
Composite. EWH has a fairly large real estate component, while EWT has
more than 50% of its value invested in technology-oriented issues. The
fund's largest holding is Taiwan Semiconductor (TSM), which accounts for
a full 12.14% of EWT.
It is worth noting that the Taiwan iShares are more volatile than
most other funds. This is because the Taiwanese stock market is quite
volatile. Taiwan, although not truly a developing country, sometimes
trades as if it was one. The country's economy was susceptible to the
so-called 1997 "Asian Contagion," when many Asian stock
markets fell sharply due to a currency crisis. There is also always
political risk vis-à-vis China, which claims Taiwan is still part of
the mainland.
| MSCI
Taiwan iShares (EWT) |
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| Type: |
Sector |
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| Similar funds: |
MSCI Hong
Kong iShares (EWH) |
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MSCI Japan
iShares (EWJ) |
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MSCI
Malaysia iShares (EWM) |
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| Options?: |
No |
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| Performance
Data |
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| 52-week High: |
$13.43 |
3/4/2004 |
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Annualized
return since: |
| 52-week Low: |
$9.51 |
7/26/2004 |
|
One-year |
-1.59% |
| YTD Return: |
-6.67% |
(as
of 7/30/2004) |
Three-year |
4.54% |
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Five-year |
N/A |
| Dividends: |
$0.45 |
past 12-mos |
Life of fund* |
-12.03% |
| Expense: |
0.74% |
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*
- Started trading 6/23/00 |
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| Correlation
Data* |
(1/02/02-7/30/04) |
Holdings* |
(as of 7/31/2004) |
| Dow
Jones Industrials |
54.6% |
|
Taiwan Semi
(TSM) |
12.14% |
| S&P 500 |
|
56.6% |
|
United Microelec (UMC) |
5.95% |
| Nasdaq
Composite |
60.9% |
|
Cathay Fincl (CHYYY)** |
4.30% |
| Nasdaq-100 |
|
59.5% |
|
Hon Hai Precision (HNHPF)** |
4.11% |
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Nan Ya Plastic |
3.98% |
| EWH |
|
56.2% |
|
China Steel (CISXF)** |
3.58% |
| EWJ |
|
57.3% |
|
Mega Fincl (CTBFF)** |
3.13% |
| EWM |
|
28.8% |
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Formosa Plastic |
2.96% |
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Chinatrust Fincl |
2.66% |
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China Development
Fincl |
2.60% |
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* Percent top ten
are of total |
45.41% |
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** Pink Sheets
(very illiquid) |
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| Average
Daily Volume |
|
Average
Daily Price Range |
| Jul-04 |
402,352 |
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Jul-04 |
2.5% |
| 2004 YTD |
621,575 |
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2004 YTD |
2.8% |
| 2003 |
293,165 |
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2003 |
2.9% |
| *
- Correlation measures how closely the two items track each
other |
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*
Includes prior day's close (true range) |
HOW TO MAKE MONEY IN EWT THIS YEAR
The Taiwan iShares now shows potential to push up towards $11.50 to
$12.00 in the coming month. Unfortunately, the fund's larger bear market
is not yet over. As such, I expect EWT to drop to a low near $8.50
during the first half of 2005.
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