Taiwan Semiconductor Manufacturing Co.’s stock is lagging smaller rival United Microelectronics Corp. after being brushed aside by some of Taiwan’s biggest yield-focused exchange-traded funds.

Shares of TSMC, the world’s largest contract chipmaker, have dropped 3.7% this year, compared to an 11% gain for UMC, according to data compiled by Bloomberg. UMC’s dividend yield of more than 6% has given it substantial exposure to Taiwan’s high-dividend ETFs, which collectively manage more than $44 billion in assets, Bloomberg data show.

UMC’s stock “has benefited from local high-dividend ETF inflows, with passive funds prioritizing yield over fundamentals,” said Capital Investment Management Corp. Chairman Andrew Tsai. Its rally has strengthened leading up to its ex-dividend date on June 24, he added.

Taiwan’s three biggest yield-focused ETFs count UMC, the island’s No. 2 semiconductor manufacturer, as a top 10 holding. TSMC, with a dividend yield of less than 2%, isn’t among their largest allocations. The trio of products attracted some of the most inflows among equity ETFs in the Asia Pacific region this year, totaling about $10 billion.

Analysts say UMC’s low valuation and high liquidity are attractive to conservative investors seeking defensive plays. The company’s partnership with Intel Corp. adds another layer of appeal.

Still, UMC’s outperformance may be short-lived. Short interest on the stock rose to a record high of about 9% of outstanding shares, according to S&P Global data. Its share price has also exceeded analysts’ average 12-month target, data compiled by Bloomberg show.