Shinhan Asset Management's 'SOL US 30-Year Treasury Covered Call ETF' Surpasses 20 Billion KRW in Net Assets

Shinhan Asset Management announced on the 17th that the ‘SOL US 30-Year Treasury Covered Call (Synthetic) ETF,’ which was listed at the end of last year, has surpassed 20 billion KRW in net assets. Through steady buying by individual investors, the ETF has sold out its initial listing volume and is rapidly increasing in size.

The ‘SOL US 30-Year Treasury Covered Call ETF’ invests in long-term US bonds using a covered call strategy, allowing for stable monthly dividend income. It is managed similarly to the ‘iShares Treasury 20+ Year Treasury Bond Buywrite Strategy ETF,’ well known to domestic investors as TLTW.

The ‘covered call strategy’ involves buying the underlying asset while simultaneously selling call options on that asset. Utilizing this strategy cushions losses by the amount of the option premium if the underlying asset declines. However, when the underlying asset rises, the returns are capped at a certain level.

Junghyun Kim, Head of the ETF Business Division at Shinhan Asset Management, said, “Net purchases by individual investors have continued for two weeks since listing, which we consider meaningful data indicating strong investor demand for products using a covered call strategy based on bonds.” He added, “With over 50% of holdings in pension accounts, the SOL US 30-Year Treasury Covered Call ETF, which focuses more on dividends, is establishing itself as a key component of pension investors’ monthly dividend portfolios.”

The first monthly dividend of the ‘SOL US 30-Year Treasury Covered Call ETF’ will be paid on February 1. Investors who purchase and hold the ETF until January 29, the day before the ex-dividend date, will receive the dividend on the first business day, February 1. The timing of dividend deposits may vary depending on brokerage policies. Going forward, investors can expect monthly dividend payments on a similar schedule. Although the amount may fluctuate depending on the price movement of the underlying asset, a monthly dividend yield of over 1% and an annual yield exceeding 10% are anticipated.

Meanwhile, to commemorate the first dividend payment of the SOL US 30-Year Treasury Covered Call ETF, Shinhan Asset Management is holding a dividend payment certification event. Investors who purchase any of the SOL monthly dividend ETF series (SOL US S&P 500, SOL US Dividend Dow Jones, SOL US Dividend Dow Jones (H), SOL US 30-Year Treasury Covered Call) and submit a screenshot showing the deposit of their monthly dividend payment will be entered into a draw. Three hundred winners will receive a Starbucks Americano gifticon (up to 2 cups).

The event runs from February 1 to 16, with winners announced and gifticons distributed on February 23. Detailed information about the event and prizes can be found on the SOL ETF blog.