00981A earned 61% in a year but got criticized? Traders criticize ETF copycat for peeling profits! Experts have a different view

00981A Configuration of 0050 and 0052 triggers the doll-rolling controversy. One side criticizes overlapping costs, while the other believes it is a pragmatic solution to regulatory and liquidity restrictions for tracking Beta.

The controversy arose when purchasing ETFs like 0050 and 0052. Trader Giant Jie criticized this move as peeling two layers of skin, questioning whether managers are providing passive performance at active fee rates. DeFi commentator Yu Zhe’an and researcher Freddy countered, stating that configuring ETFs can reduce slippage costs and bypass regulations limiting single holdings to 10%. In a market with a high weighting of TSMC, this is a practical strategy to track Beta and optimize liquidity.

Vincent, co-founder of Manbao and former J.P. Morgan Asset Management Executive Director, also said that holding limits are a pain point for many funds. In his previous work experience, his team often found ways to keep fund performance aligned with TSMC’s trend. Knowing they should buy more TSMC but being forced to sell due to holding limits.

Famous trader Giant Jie: 00981A Peels Two Layers of Investors’ Skin

Recently, trader Giant Jie called out the Uni-President Active ETF (00981A) on social media as Taiwan’s first doll-rolling ETF, sparking market discussion. He pointed out that 00981A charges higher fees under the guise of active management, yet significantly buys passive ETFs like Yuanta Taiwan 50 (0050) and Fubon Technology (0052), questioning whether it is truly active or passive.

Giant Jie used the metaphor “asking a Michelin chef to serve McDonald’s” to satirize investors paying active management fees but getting passive index exposure; he also directly accused this move of bypassing the single holding limit, indirectly holding TSMC. Besides strategic logic, he criticized this structure for creating a “cost within a cost” peeling fee, joking that if 00981A continues expanding its ETF holdings, it might become the “King of ETF Doll-Rolling.”

00981A Achieves 61.6% Return, Researcher Yu Zhe’an: Evaluating from Trading Costs, Not Lazy

Regarding the controversy, researcher Yu Zhe’an offered a more pragmatic analysis. He pointed out that allocating other ETFs in active funds can practically achieve a minimum Beta, improve liquidity, reduce redemption impact, quickly establish sector exposure, and optimize beneficiary interests under regulatory restrictions.

Yu Zhe’an further used data to show that even with double management fees, the additional annualized cost is only about 0.0031%. Compared to trading slippage that can exceed 0.5% in small- and mid-cap stocks, the overall cost of ETF configuration under a single redemption impact scenario is significantly lower. He believes that, from a comprehensive assessment of actual trading costs, securities transaction taxes, and market liquidity, this managerial move is not necessarily lazy but a choice prioritizing overall investor benefits.

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Vincent, co-founder of Manbao and former J.P. Morgan Asset Management Executive Director, also said that holding limits are a pain point for many funds. In his previous work experience, his team often found ways to keep fund performance aligned with TSMC’s trend. Knowing they should buy more TSMC but being forced to sell due to holding limits.

Researcher Freddy: Under the 10% Single Holding Limit, It’s a Reasonable Operation

Researcher Freddy believes that turning active ETFs into a “fund of funds” is not inherently wrong; the key still lies in whether the investment goal aligns with beneficiaries’ expectations. He pointed out that under the 10% single holding limit and increased market volatility, using ETFs to quickly adjust overall Beta, reduce cash drag, or maintain full positions during large capital inflows are reasonable managerial considerations.

Additionally, ETFs can effectively reduce price impact on core holdings during large redemptions. Freddy bluntly states that if investors only pursue leveraged Beta or style factors, they don’t need to choose active ETFs; but if the goal is risk-adjusted Alpha, market timing itself can be a source of value. He summarized that many pension funds and sovereign funds already adopt similar structures. Simply criticizing fund of funds on the surface often overlooks the practical division of labor and restrictions in institutional investing.

• This article is reprinted with permission from: 《Chain News》
• Original title: 《00981A earns 61% annually but gets criticized? Giant Jie criticizes ETF doll-rolling for peeling 2 layers of skin! Experts have different views》
• Original author: Neo