In early 2025, one exchange-traded fund (ETF) quietly surged to the top of performance charts among dividend-paying funds in Taiwan—00909 Cathay Digital Payment Services ETF. With a year-to-date return of 28% by late March, it outpaced even the most popular domestic ETFs like 0050 and 0056. What makes this fund stand out? It's Taiwan’s only ETF that offers indirect exposure to the booming cryptocurrency ecosystem, including companies involved in Bitcoin mining, digital asset exchanges, and blockchain infrastructure.
Unlike direct crypto investments, 00909 invests in publicly traded global firms shaping the future of digital finance—such as MicroStrategy, the world’s largest corporate holder of Bitcoin, and Coinbase, the leading U.S. crypto exchange. This article dives deep into how this unique ETF works, its investment strategy, performance trends, and whether it deserves a spot in your portfolio.
What Is the 00909 Cathay Digital Payment ETF?
Launched on July 13, 2022, at an initial price of NT$15, the 00909 ETF tracks the **Solactive Global Digital Payment Services Index** using full replication. As of March 2025, its share price had climbed to **NT$29.82**, reflecting strong investor confidence.
Key facts:
- Dividend frequency: Annual payout, typically distributed in April.
- Risk level: RR5 (high risk), suitable for investors with higher risk tolerance.
- Expense ratio: 0.80% management fee + 0.15% custody fee = 0.95% total.
- Fund size: NT$857 million (ranked #163 among ~250 ETFs in Taiwan).
- Custodian bank:华南 Bank (Hua Nan Commercial Bank).
This is an overseas-equity ETF, meaning it holds foreign-listed stocks and distributes foreign-sourced dividends—offering potential tax advantages for high-income earners under Taiwan’s minimum tax rules.
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How Does the Underlying Index Work?
The fund follows the Solactive Global Digital Payment Services Index, which differs from traditional market-cap-weighted indices by focusing on thematic relevance rather than size alone.
Key Selection Criteria
Geographic Focus
- Targets companies listed in developed markets, including Taiwan and South Korea.
- Explicitly excludes Chinese-listed firms.
Eligibility Filters
To qualify for inclusion:
Market capitalization:
- New entrants: ≥ $200 million
- Existing members: ≥ $160 million
Liquidity:
- New: Average daily trading volume ≥ $3 million over past 3 months
- Existing: ≥ $2.4 million
Thematic Screening with ARTIS®
Solactive uses its proprietary ARTIS® natural language processing (NLP) algorithm to analyze public data—such as financial news, company reports, and press releases—to assess each firm’s involvement in digital payment and blockchain ecosystems.
Companies are scored based on their engagement in:
- Digital payment platforms and software integration.
- Cryptocurrency mining hardware, exchanges, wallets, or trading.
- Blockchain and decentralized application (dApp) development.
- Issuance of digital assets like cryptocurrencies or NFTs.
Only those with high thematic exposure advance to the next stage.
Stock Selection & Weighting Methodology
After filtering eligible candidates, the index applies a structured ranking system:
- All qualifying stocks are ranked by ARTIS® score (descending order).
- Top 6 scorers are automatically included.
- Stocks ranked 7–36 are added until the index reaches 30 components.
- If fewer than 30 qualify, additional top-scoring securities are added until the target is met.
Weighting Rules
- Market-cap weighted, but with a 5% cap per stock.
- Any excess weight above 5% is redistributed proportionally across other holdings.
Index Rebalancing
Revised twice a year—effective on the last trading day of January and July—ensuring up-to-date representation of the evolving digital economy.
Portfolio Composition: Where Does 00909 Invest?
Despite being domiciled in Taiwan, over 89% of 00909’s holdings are based in North America, with another 9.47% in Japan. This global focus reduces correlation with local market trends.
Sector Breakdown
- ~62% linked to crypto ecosystem: Mining, exchanges, blockchain tech.
- ~38% in traditional digital payments: Payment processors and fintech platforms.
Top Holdings (as of Q1 2025)
- MicroStrategy (MSTR) – The world’s largest public Bitcoin holder; up over 150% YTD.
- Coinbase (COIN) – Largest U.S.-listed crypto exchange; +50% YTD.
- Visa & Mastercard – Household names in global payments.
- NVIDIA & AMD – Key semiconductor enablers of blockchain computing power.
This blend ensures exposure isn’t limited to volatile crypto-native firms—established players provide balance.
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Dividend Outlook & Historical Performance
As an annual-distribution ETF, 00909 paid its first dividend in April 2024 and successfully filled the ex-dividend gap—a positive signal for income investors.
Expected 2025 Payout
- Projected dividend: NT$1.81 per unit
- Implied yield: ~6% at current prices—up from previous year
- Likely composition: A mix of capital gains and modest income, given low underlying stock yields in the U.S.
Note: Cathay Asset Management does not disclose detailed NAV breakdowns, so exact sources remain estimates.
Price Trend & Market Correlation
From January to March 29, 2025, 00909 rose from NT$23.28 to NT$29.82—an impressive +28% gain. Its performance closely mirrors movements in Bitcoin (BTC) and Ethereum (ETH), with a correlation coefficient exceeding 0.6.
This strong link stems from its heavy weighting in crypto-adjacent firms whose valuations rise with broader market sentiment.
While Bitcoin briefly touched **$70,000** in early 2025—surpassing silver in total market value—investors should remember past volatility: BTC once crashed from $69,000 to below $16,000 within months.
Since 00909 launched when BTC was around $22,000, it has benefited from both recovery and institutional adoption phases—including the approval of spot Bitcoin ETFs in the U.S. in January 2025.
FAQ: Your Questions Answered
Q1: Can I use 00909 to invest directly in Bitcoin?
No. The ETF does not hold any cryptocurrency. Instead, it invests in publicly traded companies involved in the digital asset ecosystem—offering indirect exposure without custody risks.
Q2: Is this ETF suitable for conservative investors?
Due to its RR5 risk rating and high volatility tied to crypto markets, it's best suited for aggressive or long-term investors who understand technology sector cycles.
Q3: How does taxation work on dividends?
Dividends are treated as foreign-sourced income. They count toward Taiwan’s Basic Income Tax only if your total annual income exceeds NT$7.5 million—potentially beneficial for high-net-worth individuals.
Q4: Why doesn’t it include Chinese companies?
The index excludes mainland China-listed firms due to regulatory uncertainty and geopolitical risks—aligning with many global ESG and compliance frameworks.
Q5: Are there plans for more crypto-related ETFs in Taiwan?
Currently, Taiwan has no direct crypto ETFs. However, growing demand may prompt regulators to allow more products like 00909—or even spot Bitcoin ETFs—in the future.
Q6: How often should I review this holding?
Given semi-annual rebalancing and market sensitivity, reviewing every six months—around January and July—is advisable to stay aligned with portfolio changes.
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Final Thoughts: Should You Invest in 00909?
✅ Advantages
- Low overlap with mainstream Taiwan ETFs – Diversifies beyond local equities.
- Broad industry exposure – Balances mining, exchanges, semiconductors, and payment giants.
- High correlation with Bitcoin – Offers one of the closest legal proxies for crypto exposure.
- Tax-efficient dividends – Beneficial for high-income taxpayers.
- Thematic tailwinds – Fueled by Bitcoin halving (expected April 2025) and increasing institutional adoption.
⚠️ Risks to Consider
- High volatility: Sensitive to crypto market swings.
- Limited investor familiarity: Requires understanding of blockchain business models.
- Above-average fees: 0.95% expense ratio is higher than typical domestic ETFs.
Core Keywords
digital payment ETF, Bitcoin investment Taiwan, cryptocurrency ETF, MicroStrategy stock, Coinbase investment, Solactive index, high-risk ETF, dividend-paying crypto fund
For investors seeking exposure to the transformative power of blockchain and digital finance—without directly buying crypto—00909 Cathay Digital Payment Services ETF stands as a compelling option in Taiwan’s evolving financial landscape.