The Taiwan Stock Exchange (TWSE) firmly believes that capital market is not just a platform for financial operations but should also be a part of everyone’s financial planning. To implement inclusive finance policies, the TWSE launched the dollar-cost averaging plan in January 2017 and introduced the intraday odd-lot trading system in October 2020. These two engines of growth in inclusive finance have significantly lowered the investment threshold, allowing small investors easier access to the capital market. These innovations not only broaden investment options but also make financial management more accessible, serving as a major milestone in inclusive finance.
Achievements and Enhancements in Inclusive Finance Policies
As of December 2024, the dollar-cost averaging plan has been in operation for eight years, with cumulative investments exceeding NT$390 billion. The monthly investment amounts have shown consistent growth. In January 2023, monthly investment amounts surpassed NT$10 billion, nearly tripling the amount from January 2022. This demonstrates the effectiveness of the regular investment plan in enhancing the convenience of small-scale investing and enabling risk diversification.
The intraday odd-lot trading system, implemented since October 2020, has also shown significant success. By December 2024, the average daily trading value of intraday odd-lot transactions reached NT$5.9 billion, a growth of 140% compared to the previous year. The system has reduced investment barriers, particularly benefiting younger generations and small-scale investors.
To further enhance market liquidity and trading efficiency, the matching interval for intraday odd-lot trading has been shortened to 5 seconds since December 2nd, 2024. This change is expected to further boost the liquidity of intraday odd-lot trading, increasing trading opportunities and efficiency.
Who Benefits from Inclusive Finance?
Observing the demographic of dollar-cost averaging plan participants in 2024, the majority of investors are concentrated in the 21 to 50 age group. Among them, those aged 21 to 30 (27.25%) and 31 to 40 (25.93%) account for the largest proportions, collectively exceeding 50% of total participants. This reflects that the younger generation has developed financial awareness and has begun preparing for long-term investment planning early.
In terms of investment amount distribution, the 41 to 50 age group contributes the highest proportion, accounting for 27.33% of the total investment amount, followed by the 31 to 40 age group at 23.63%, and the 51 to 60 age group at 20.31%. While participants under the age of 20 contribute only 4.24% of the total investment amount, their participation rate accounts for 8.68%.
Observing the distribution of trading value by investor type in the intraday odd-lot trading session in 2024, domestic individual investors accounted for 78.6% of the total, far surpassing other investor types.
Analyzing the age distribution of individual investors participating in odd-lot trading, those aged 20 or younger and 21 to 30 collectively represented approximately 25.39% of total accounts, significantly higher than the 20.41% observed in regular trading session. Additionally, the age group with the highest proportion of trading accounts (31 to 40 years old) in the intraday odd-lot trading session is younger than the main trading group for regular trading session (41 to 50 years old). This demonstrates the appeal of the system to younger and small-scale investors, highlighting the effectiveness of intraday odd-lot trading in encouraging their participation in the stock market.
What Do Investors Choose?
Currently, investors participating in dollar-cost averaging plans can choose to invest in stocks and ETFs. The selection of these investment targets is determined by securities firms based on their respective business strategies, with the stipulation that leveraged and inverse ETFs are excluded.
In 2024, the investment amount distribution between ETFs and stocks was approximately 82% in ETFs and 18% in stocks. Similarly, in terms of the number of investors, about 76% participated in ETF dollar-cost averaging plans, while 24% invested in individual stocks, indicating a preference among Taiwanese investors for ETFs over individual stocks in dollar-cost averaging plans.
When categorizing investment targets, investors showed a preference for blue-chip and financial stocks in their dollar-cost averaging investments. For ETFs, there was a tendency towards market capitalization-weighted ETFs and dividend-paying ETFs.
Investors in dollar-cost averaging plans prefer ETFs over individual stocks, with ETFs accounting for 82% of the total investment amount. Popular stocks include Taiwan Semiconductor Manufacturing Company (TSMC) and Mega Financial Holding, while top ETFs include Yuanta Taiwan 50 and Cathay Sustainable High Dividend.
Among investors in dollar-cost averaging plans, approximately 40% invested in Taiwan Semiconductor Manufacturing Company (TSMC), with over 10% each investing in Mega Financial Holding and E.SUN Financial Holding. In terms of investment amounts, 30% was concentrated in TSMC.
For ETF dollar-cost averaging plan participants, over 30% invested in market capitalization-weighted ETFs such as Yuanta/P-shares Taiwan Top 50 ETF (0050.TW) and dividend-paying ETFs like Cathay Taiwan Sustainable High Dividend ETF and Yuanta High Dividend ETF.
The primary targets for intraday odd-lot trading are blue-chip stocks, with over 50% of the trading value concentrated in constituents of the Taiwan 50 Index and 19.3% in constituents of the Taiwan Mid-Cap 100 Index. Other individual stocks account for approximately 14.9%, indicating that the implementation of intraday odd-lot trading has effectively enabled small-scale investors to access higher-barrier stocks.
Analyzing the popular stock targets for intraday odd-lot trading, more than 40% of accounts were trading TSMC, followed by Hon Hai Precision Industry Co., Ltd. (16.5%). In terms of transaction value, TSMC also led significantly with 26.81%.
For ETF transactions in intraday odd-lot trading, over 20% of trading accounts were involved in market capitalization-weighted ETFs (such as Yuanta/P-shares Taiwan Top 50 ETF and Fubon Taiwan 50 ETF) and dividend-paying ETFs (such as Cathay Taiwan Sustainable High Dividend ETF and Yuanta High Dividend ETF). Based on trading value, the Yuanta Taiwan 50 ETF and Fubon Taiwan 50 ETF ranked first and second, with 22.03% and 14.62% of the total, respectively. The Yuanta Daily Taiwan 50 Bull 2X ETF, a short-term trading product, ranked third in transaction value for intraday odd-lot trading.
Inclusive Finance Blossoms, Nurturing a Friendly Investment Environment
TWSE remains committed to creating an inclusive and diverse investment environment. Through innovative mechanisms like dollar-cost averaging plan and intraday odd-lot trading, investment opportunities have been made accessible to everyone, injecting vitality into the capital market. In the future, TWSE will continue to listen to market feedback and collaborate with stakeholders to guide more investors into the capital market, promoting wealth accumulation and shared prosperity.