Samsung Asset Management Lists Two Products Including KODEX US Nasdaq 100 Daily Covered Call OTM

Samsung Asset Management announced on the 22nd that it will newly list two ETFs: the ‘KODEX US Nasdaq100 Daily Covered Call OTM ETF,’ which invests in the US Nasdaq 100 while utilizing daily options to earn option premiums, and the ‘KODEX Semiconductor Leverage ETF,’ which invests twice in the Korean semiconductor industry.

The KODEX US Nasdaq100 Daily Covered Call OTM ETF invests in the US Nasdaq 100 index while simultaneously employing a 100% covered call strategy using daily OTM (Out of the Money) options to pursue a certain level of capital gains along with high premium income. This product was developed through long-term collaboration between Samsung Asset Management and Nasdaq, and it is the ‘first domestic ETF to execute daily physical option trading without time lag.’

The index tracked by the KODEX US Nasdaq100 Daily Covered Call OTM ETF, ‘Nasdaq100 Daily Covered Call 101,’ has had an average premium income of about 52% over the past five years. Even in 2019, when the premium was the lowest, it recorded approximately 23% (monthly distribution rate of 1.74%). This ETF is a monthly dividend product, and since the option premium level varies each month, the maximum distribution rate is capped at 20% annually (1.67% monthly). Any premium exceeding this cap is reinvested to pursue compound interest effects. The monthly distribution rate is the highest compared to existing domestic monthly dividend ETFs.

In particular, since the strike price of the call option, which allows the counterparty to buy the stock, is set at a 1% increase in the Nasdaq 100 index on the same day (OTM, out of the money), investors can simultaneously gain up to 1% daily capital gains and option premiums.

Meanwhile, Samsung Asset Management introduced the country’s first ‘time-lag-free daily covered call strategy’ by utilizing its New York local subsidiary to conduct same-day physical option trading in the US market. Until now, domestic listed ETFs using US option trading faced restrictions on real-time trading due to the time difference with the US market, calculating strike prices based on the previous day’s underlying index and executing call option sales the next day or using synthetic management methods. This product improves trading accuracy and reduces management costs by calculating strike prices based on the same day’s underlying index in the US market and conducting physical option trading.

Additionally, the KODEX Semiconductor Leverage ETF aims to track the KRX Semiconductor Index of the Korea Exchange at twice the leverage. This index heavily includes leading semiconductor companies such as Samsung Electronics (38.7%), SK Hynix (42.9%), and Hanmi Semiconductor (19.6%), which has recently emerged as a major player related to HBM (High Bandwidth Memory).

The semiconductor sector showed strong performance until July this year, supported by a rebound in the semiconductor market. However, concerns about a peak-out in the semiconductor field and controversies over the overvaluation of AI-related stocks have led to a significant price correction in the second half of the year compared to other sectors. Nonetheless, domestic investors’ interest in the semiconductor industry continues as demand for US-origin AI chips and HBM remains high.

Im Taehyuk, Executive Director of the ETF Management Division at Samsung Asset Management, said, “As the US stock market continues to hit new highs day after day and has risen for a long time, many investors believe that a slowdown may occur for a while. The 100% daily covered call OTM strategy, which participates in up to a 1% daily price increase of the Nasdaq 100 index while additionally pursuing monthly dividends of up to 20% annually, could be a new investment alternative for investors.”

He added, “The domestic semiconductor sector is a typical cyclical industry, and many investors tend to trade according to the semiconductor industry cycle. Since the KODEX Semiconductor Leverage ETF tracks the KRX Semiconductor Index, which represents the domestic semiconductor market, at twice the leverage, it will be a good investment product for aggressive investors who believe the recent adjustment period will be overcome.”