Mirae Asset Global Investments announced on the 22nd that the total net assets of the three ‘TIGER Premium Monthly Dividend Exchange-Traded Funds (ETFs)’ have surpassed 1 trillion KRW, and it will hold a customer appreciation event.
According to the Korea Exchange, as of the closing price on the 19th, the net assets of the ‘TIGER US Dividend +7% Premium Dow Jones ETF’ amounted to 548.9 billion KRW. The premium monthly dividend ETF series ‘TIGER US 30-Year Treasury Premium Active (H) ETF’ recorded 268.5 billion KRW, and the ‘TIGER US Tech TOP10 +10% Premium ETF’ recorded 232.4 billion KRW.
These three ETFs are the world’s first ETFs to apply the premium covered call strategy by Mirae Asset Global Investments. A covered call is a strategy that involves buying the underlying asset and simultaneously selling call options on that asset. Using the covered call strategy cushions losses by the amount of the option premium when the stock price falls, but it has the downside of limiting returns to a certain level when the price rises.
To compensate for this drawback, unlike typical covered call ETFs that sell 100% of call options, these three ETFs adjust the proportion of options sold to maintain a target premium. They can expect dividend yields that add a certain ratio to the underlying index’s annual average dividend yield.
The extent of stock price appreciation and dividend income varies depending on the proportion of options sold. For example, the ‘TIGER US Dividend +7% Premium Dow Jones ETF’ is designed to pursue an additional annual distribution of 7% by adjusting the call option selling ratio, while simultaneously enjoying 60% of the stock price appreciation effect. This structure secures an appropriate level of income while also gaining some capital gains from market rises. Additionally, these three ETFs are monthly dividend ETFs that pay stable monthly distributions based on the premium covered call strategy.
Mirae Asset Global Investments is holding a customer event to celebrate the total net assets of the three TIGER Premium Monthly Dividend ETFs surpassing 1 trillion KRW. Until the 6th of next month, participants who certify ownership of the ETFs will be entered into a draw to receive gifticons. Detailed event information can be found on the TIGER ETF website.
Kim Su-myeong, Senior Manager at Mirae Asset Global Investments, said, “The TIGER Premium Monthly Dividend ETF series is designed to secure an appropriate level of income by selling call options selectively and to gain capital gains together. Recently, covered call ETFs have been receiving much attention, and for steady dividends and dividend growth, it is important for investors to find the right balance between capital gains and income.”
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