What is an ETF? How to read ETFs such as 0050 and 0056

An ETF packages a basket of stocks into one fund that trades on the exchange. When looking at one, check what it tracks, its distribution rules and its fees.

Updated：2026-11-15

What an ETF is

An ETF (exchange-traded fund) packages a basket of stocks (or bonds and so on) into one fund that trades on the exchange like a stock. Buying a share (or lot) of an ETF means indirectly holding the basket of constituents behind it.

Common types

• Passive ETFs track an index, with constituents set by the index rules, for example the largest companies by market value, high-dividend companies, or a particular industry or theme.
• Active ETFs have a fund manager choose constituents by a strategy rather than tracking an index.
• Besides equity ETFs there are bond and commodity ETFs; this article focuses on equity ETFs.

How 0050 and 0056 differ

These two are often mentioned in Taiwan, and the main difference is the index they track:

• 0050 (Yuanta Taiwan 50) tracks the Taiwan 50 Index, whose constituents are chosen mainly by market value.
• 0056 (Yuanta High Dividend) tracks the Taiwan High Dividend Index, whose constituents are chosen on criteria such as expected dividend yield.

Because the index selection and rebalancing rules differ, the constituents, industry weights, distributions and volatility differ too. See each fund’s prospectus and the issuer’s website, and compare with the data on this site’s ETF page.

A checklist for reading an ETF

1. What it tracks: an index, a theme or an active strategy.
2. Constituents and industry weights: which stocks and industries it concentrates in.
3. Distributions: how often it pays and the source and rules of the payout.
4. Costs: management and custody fees are included in the net asset value; brokerage fees and transaction tax apply when you trade.
5. Size and trading volume: these affect how easily orders fill.

Things to keep in mind

• An ETF spreads the risk of a single company but still moves with the market and can lose principal.
• A distribution is not profit: after it, the ETF price is adjusted for the payout (see “Ex-dividend and adjusted prices”).
• An ETF’s market price can differ from its net asset value, and changes in constituents alter its holdings.
• Two “high dividend” ETFs can follow different indexes and issuer rules, so do not judge by the name alone.

On this site

• Market → ETF lists ETFs and their distribution data.
• Market → Calendar shows ex-dividend dates for ETFs and stocks.
• A stock page shows an ETF’s price history.

This article only explains terms and how to read the data. Tenmizu does not provide investment recommendations and this is not investment advice.