Hanwha Asset Management "Value-Up Benefits... Focus on Arirang High Dividend ETF"

Hanwha Asset Management announced on the 14th that it recommends the 'ARIRANG High Dividend Stocks' and 'ARIRANG High Dividend Stocks and Bonds Mixed' exchange-traded funds (ETFs) as financial products benefiting from the government's 'Value-Up' policy aimed at resolving the undervaluation of the Korean stock market.

According to financial information provider FnGuide, the recent 1-month, 3-month, and 6-month returns of 'ARIRANG High Dividend Stocks' were 2.44%, 17.35%, and 21.50%, respectively (based on closing price on March 12). These returns outperform the 'KOSPI 200', which rose 2.21%, 6.28%, and 7.62% during the same periods. Since its listing in 2012, 'ARIRANG High Dividend Stocks' has consistently paid stable dividends, recording an average dividend yield of 4.84% over the past five years, and its performance including dividend reinvestment has reached approximately 100.11% since listing.

The government recently held the '1st Seminar on Corporate Value-Up Support Measures for the Leap of the Korean Stock Market' and announced key details. These include requiring listed companies to disclose corporate value enhancement plans and creating indices and ETFs related to companies with excellent corporate value. The Financial Services Commission plans to hold a second seminar in May and finalize the guidelines in June. Additionally, the Korea Exchange’s dedicated 'Corporate Value Support Task Force' for the 'Value-Up' policy was officially launched recently.

Hanwha Asset Management views the financial authorities’ strong commitment to mid- to long-term policy implementation positively and focuses on the high likelihood of policy compliance by financial companies, large corporations, and utility companies included in the 'ARIRANG High Dividend Stocks' ETF. In fact, many low PBR (price-to-book ratio) companies contained in 'ARIRANG High Dividend Stocks' have already started shareholder returns.

Among the top 10 holdings in the ETF are Hana Financial Group, JB Financial Group, KB Financial Group, BNK Financial Group, and SK Telecom, all of which have decided to retire treasury shares. Kia, which achieved record-high performance last year, has pledged to implement shareholder return policies such as share repurchases and dividend increases.

'ARIRANG High Dividend Stocks' is a representative domestic high dividend stock ETF that invests in the top 30 stocks with the highest expected dividend yields among the top 200 stocks by free-float market capitalization. Financial stocks account for about 60% of the ETF, holding the largest proportion, and it includes many representative undervalued stocks expected to benefit from the 'Value-Up' policy, such as consumer goods, telecommunication services, energy, and utilities. The constituent stocks include Hana Financial Group, Kia, Industrial Bank of Korea, Woori Financial Group, JB Financial Group, KB Financial Group, Korea Gas Corporation, BNK Financial Group, Samsung Card, and SK Telecom. As of the 12th of this month, the net asset value was 323.4 billion KRW, with a total expense ratio of 0.23%.

Hanwha Asset Management also recommends the ‘ARIRANG High Dividend Stocks and Bonds Mixed’ ETF for investors seeking more stable investments. By investing 40% in high dividend stocks with high expected dividend yields and 60% in three types of government bonds, it enables more stable management. As a safe asset, it can be invested 100% without restrictions in retirement pension (DC·IRP) accounts. Recently, the dividend payment cycle was changed to a monthly basis, allowing for a steady monthly cash flow. Dividends can be reinvested or utilized in various ways according to the investor’s situation.

Kim Kyu-yeon, manager of the ETF management team at Hanwha Asset Management, said, "The Value-Up program encourages voluntary participation by companies, so large corporations and financial companies that value social awareness are more likely to participate." He added, "As these companies are introducing quarterly dividends and expanding shareholder returns through share repurchases and retirements, the attractiveness of the 'ARIRANG High Dividend Stocks' ETF, which has a high weighting of these stocks, will increase."