Hanwha Asset Management announced on the 5th that the net asset value of the exchange-traded fund (ETF) 'ARIRANGGobaedangju,' which invests in domestic high-dividend stocks, has surpassed 400 billion KRW.
The net asset value of the 'ARIRANGGobaedangju' ETF exceeded 400 billion KRW as of the 3rd. The net asset value, which was around 200 billion KRW at the beginning of the year, has approximately doubled in about six months.
'ARIRANGGobaedangju' is the largest ETF product investing in domestic high-dividend stocks. The distribution cycle was changed to a monthly basis in May, and it has recorded an average distribution rate of 5.2% over the past five years.
Considering the reinvestment of dividends, the periodical returns of 'ARIRANGGobaedangju' are 5.9% for the last month, 30.7% for six months, and 40.2% for one year.
Notably, the Ministry of Economy and Finance is promoting a plan to provide separate taxation benefits to shareholders of companies that increase dividends, thereby reducing dividend income tax.
Specifically, for the increased dividend portion, the withholding tax rate on dividend income up to 20 million KRW will be lowered from the existing 14% to 9%. For the portion exceeding 20 million KRW, the tax law amendment plan will allow taxpayers to choose between comprehensive taxation or separate taxation at a 25% rate, instead of the previous comprehensive taxation only.
'ARIRANGGobaedangju' selects and invests in high-dividend stocks ranked within the top 30 in expected dividend yield among the top 200 stocks by free float market capitalization. Unlike past dividend yields, it focuses on future expected dividend yields, continuously adjusting its portfolio with stocks expected to pay high dividends annually.
As of the 3rd, the top 10 holdings by weight are Woori Financial Group, Industrial Bank of Korea, Tongyang Life Insurance, Hyundai Marine & Fire Insurance, SK Telecom, Hana Financial Group, KT&G, Samsung Securities, BNK Financial Group, and Kia.
Geum Jeong-seop, Head of the ETF Business Division at Hanwha Asset Management, said, "The government's plan to provide tax benefits to both companies actively increasing dividends and their shareholders will have a positive impact on the stock price trends of domestic dividend stocks," adding, "When investing in dividend stocks, investors usually prioritize U.S. dividend stocks, but they should also consider investing in domestic high-dividend stocks, which offer dividend yields in the 5% range and capital gains that are tax-exempt."
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