Shinhan Asset Management announced on the 25th that it will list the ‘SOL Financial Holding Plus High Dividend’ exchange-traded fund (ETF) on the Korea Stock Exchange. This is the fifth monthly dividend product of the SOL ETF, which pioneered the domestic monthly dividend ETF market, and the first product based on domestic stocks.
The SOL Financial Holding Plus High Dividend ETF is a product that allows investment focused on financial holding companies that actively participate in advanced dividend policies, such as being the first among domestic companies to regularize quarterly dividends, and are proactive in share buybacks, which are regarded as advanced shareholder returns in developed countries.
The portfolio consists of a total of 10 stocks, including nine financial holding companies such as Shinhan Financial Group, KB Financial Group, and Hana Financial Group, as well as NH Investment & Securities, which conducted its first share buyback and cancellation in 13 years to enhance shareholder value. A key feature is the high weighting of Meritz Financial Group, which has announced a target shareholder return ratio of 50%, the highest among domestic financial stocks.
Junghyun Kim, Head of the ETF Business Division at Shinhan Asset Management, said, “The SOL Financial Holding Plus High Dividend ETF is a product proactively launched by Shinhan Financial Group in line with the government’s goal of resolving the ‘Korea discount.’ Shinhan Financial Group was the first financial holding company to introduce quarterly dividends and has led shareholder value enhancement through equalizing quarterly cash dividends and gradually increasing total shareholder returns via active share buybacks and cancellations.”
Kim added, “Financial holding companies symbolize the development of the Korean financial market, which has led the advancement of the domestic financial market. They are expected to show the most active movements in government institutional improvements and financial market modernization waves, such as value-up programs. While focusing on financial holding companies in the portfolio, this product has the advantage of selecting stocks with improved dividend policies by utilizing share buyback history and expected dividend yield data among financial sector stocks.”
The SOL Financial Holding Plus High Dividend ETF includes six out of ten stocks with the highest average dividend yields over the past three years among the KOSPI 200 constituent stocks.
Kim said, “Financial holding companies show clear performance improvements, and with expected tax benefits from discussions on tax and commercial law amendments in the second half of the year, as well as various events such as additional share buybacks and cancellations to resolve undervaluation, their investment attractiveness remains high. Through a differentiated stock composition from existing bank stock ETFs and high dividend ETFs, investors can expect attractive dividends along with shareholder value growth and capital gains.”
The SOL Financial Holding Plus High Dividend ETF plans to pay its first monthly dividend on August 1, 2024, utilizing distribution resources to the fullest, consistent with the existing monthly dividend products of the SOL ETF.
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