Mirae Asset Management's 'TIGER US 30-Year Treasury Premium Active' Surpasses 300 Billion KRW in Net Assets

Mirae Asset Global Investments announced on the 30th that the net assets of the ‘TIGER US 30-Year Treasury Premium Active (H) Exchange-Traded Fund (ETF)’ have surpassed 300 billion KRW.

According to the Korea Exchange, as of the closing price on the 29th, the net assets of the ‘TIGER US 30-Year Treasury Premium Active (H) ETF’ stand at 314.9 billion KRW. It exceeded 300 billion KRW in net assets just two months after its listing on February 27.

The ‘TIGER US 30-Year Treasury Premium Active (H) ETF’ invests in US 30-year Treasury bonds and employs a covered call strategy to pursue monthly distributions of over 1%. As of the end of April, the monthly dividend yield recorded was 1.08%, which is the highest level among bond-type monthly dividend ETFs currently listed in Korea.

To maintain a high level of dividend yield, the ‘TIGER US 30-Year Treasury Premium Active (H) ETF’ limits the proportion of call option sales to a maximum of 30% (based on nominal value). A covered call is a strategy where the underlying asset is purchased while simultaneously selling call options on that asset. Using the covered call strategy, losses are cushioned by the option premium when the stock price falls, but gains are capped at a certain level when the price rises. To compensate for this drawback, the ETF employs a partial option selling strategy, allowing the remaining 70% to expect capital gains from bonds.

The ‘TIGER US 30-Year Treasury Premium Active (H) ETF’ is currency-hedged, which is expected to help defend against a weaker dollar in the event of future interest rate cuts. Additionally, as a bond-type ETF, it can be invested in 100% through retirement pension accounts. When investing through pension savings and retirement pension (DC·IRP) accounts, dividend income tax (15.4%) on monthly distributions is deferred, effectively allowing reinvestment of taxes.

Kim Su-myeong, Senior Manager of the Strategic ETF Management Division at Mirae Asset Global Investments, said, “The TIGER US 30-Year Treasury Premium Active (H) ETF limits option sales to within 30% while utilizing a weekly covered call strategy to pursue a high level of income. It is a product that offers a proper balance between capital gains and income, and also allows for betting on future interest rate cuts.”