Recently, many small investors have been asking whether buying fractional ETF shares is feasible. This is a good question because the threshold for trading Taiwanese stocks is indeed quite high.

Let's look at some numbers to get a sense. Taking Yuanta Taiwan 50 as an example, the current closing price is around 160+ NT dollars. To buy one lot, it costs over 160k NT dollars. For retail investors, this isn't a small amount, so many are wondering if they can buy fractional shares just like stocks. The answer is yes, and there are multiple ways to do it.

First, let's discuss the most straightforward method—ETF fractional share trading. Fractional shares are shares bought in amounts less than 1,000 shares, such as 100 or 500 shares. The Taiwan Stock Exchange has long allowed this mechanism, with trading during both intraday and after-hours sessions. During trading hours, orders are placed electronically, with matching occurring every minute starting at 9:10 AM; after hours, matching is consolidated at 2:30 PM.

How are transaction fees calculated? The standard rate is 0.1425%, but now, due to fierce competition among brokers, most offer discounts. For example, buying 200 shares of Yuanta Taiwan 50, after discounts, might only cost around 30 NT dollars. Even more, some brokers have cut their minimum commission from 20 NT dollars to just 1 NT dollar, making it much more friendly for small investors. However, note that while ETFs can be bought in fractional shares, the transaction prices for fractional shares may differ from full shares, and the bid-ask spread is usually larger.

If you find fractional trading liquidity insufficient or the waiting time too long, there's another option—CFD (Contract for Difference). The advantage of CFDs is leverage; for example, with 10x leverage, an investment that would normally cost over 200 USD now only requires about 20 USD. Additionally, CFDs support 24-hour trading and allow short selling, offering much more flexibility than fractional ETF trading. The downside is some spread costs, but for those seeking capital efficiency, it's still cost-effective.

By the way, a common question—do fractional ETF shares pay dividends? Yes, they do. Whether you hold 1,000 shares or just 1 share, dividends are paid out proportionally, so the more shares you hold, the more dividends you receive. This is also why, in recent years, regular investment in high-dividend ETFs has become popular, and fractional shares enable small investors to participate.

So, can you buy fractional ETF shares? Absolutely. The market is becoming increasingly friendly to small investors now. Which method you choose depends on your needs and preferences. If you want stable holdings, go for fractional shares; if you prefer flexible trading, try CFDs. You can also follow relevant ETF market data on Gate.