Shinhan Asset Management’s ‘SOL Geumyoong Jiju Plus High Dividend ETF’ Tops Returns One Month After Listing

Shinhan Asset Management's ‘SOL Financial Holding Plus High Dividend’ exchange-traded fund (ETF) announced on the 29th that its net asset size increased more than sevenfold from 8 billion KRW to 63 billion KRW within one month of listing. During the same period, the fund recorded a return of 12.02%, ranking first among major banks and financial-related ETFs, rapidly establishing itself in the market.

The 2024 tax law revision proposal includes tax support measures such as classifying companies that increased shareholder returns, including dividends and treasury stock cancellations, by more than 5% compared to the average of the previous three years as value-up excellent companies, and providing corporate tax credits. The government’s value-up program implementation is becoming more concrete. Interest from individual and institutional investors in financial holding companies, expected to be the most active participants, is also increasing.

Kim Jeong-hyun, Head of the ETF Business Division at Shinhan Asset Management, said, “Shinhan Financial Group, which has led shareholder value enhancement, has announced plans for a 50% shareholder return rate, treasury stock repurchases/cancellations, and ROE targets by 2027, concretizing financial holding companies’ plans to increase corporate value. Since the beginning of the year, Woori Financial Group, whose stock price increase was smaller compared to major financial holding companies, announced a mid-to-long-term plan to achieve a total shareholder return rate of 50%, resulting in a stock price increase of over 7%. It is necessary to continuously pay attention to companies participating in the value-up program,” he 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 to resolve the ‘Korea discount.’ It is the first among domestic companies to regularize quarterly dividends and actively participates in dividend modernization policies. It is a product that allows investment focused on financial holding companies that are actively engaged in treasury stock repurchases, which are regarded as advanced shareholder returns typical of developed countries.

The portfolio consists of 10 stocks, including nine financial holding companies such as Shinhan Financial Group, KB Financial Group, Hana Financial Group, Woori Financial Group, Meritz Financial Group, and NH Investment & Securities. It includes six of the 10 stocks with the highest average dividend yields over the past three years (2021?2023) among KOSPI 200 constituents, making it a product that can focus more on dividends among monthly dividend ETFs based on domestic stocks.

Oh Hyung-seok, ETF Management Team Manager, explained, “Corporate shareholder returns are expected to be a key investment point in the domestic stock market in the second half of the year. The SOL Financial Holding Plus High Dividend ETF, through a differentiated stock composition from existing bank stock ETFs and high dividend ETFs, offers attractive dividends along with shareholder value growth and capital gains, making it a product that can effectively respond to market changes following government policies.”

Meanwhile, the SOL Financial Holding Plus High Dividend ETF plans to pay its first monthly dividend on August 1, 2024, by maximizing the use of distribution resources, similar to existing monthly dividend products of SOL ETFs. To receive the dividend, investors must purchase the ETF by that date.