Hanwha Asset Management, 'PLUS Gobaedangju Weekly Covered Call ETF'... "Higher Returns Compared to KOSPI"

Hanwha Asset Management announced on the 19th that the ‘PLUS Gobaedangju Weekly Click Covered Call’ Exchange-Traded Fund (ETF) outperformed the KOSPI by 10.3 percentage points. This ETF is a monthly dividend type that pays distributions every month. Including the dividends paid over the past three months (393 KRW), the performance exceeds the KOSPI by 14.2 percentage points.

According to Hanwha Asset Management, the ‘PLUS Gobaedangju Weekly Click Covered Call ETF’ was listed on August 13 this year at 10,000 KRW per share, and as of the closing price on the 15th, the stock price rose about 2.5% over three months to 10,250 KRW. In contrast, the KOSPI fell 7.8% during the same period.

This ETF pays a high level of monthly dividends, so its performance is even better when considering dividends. The dividends paid so far are 130 KRW per share in August, 130 KRW in September, and 133 KRW in October, showing an increasing dividend trend. The monthly dividend yield is approximately 1.25%, which annualizes to about 15%.

Another strength of this ETF is the tax-saving effect on dividends. Generally, a 15.4% dividend income tax is imposed when receiving dividends. However, the main source of distributions for the ‘PLUS Gobaedangju Weekly Click Covered Call ETF’ consists of domestic call option selling premiums, which are exempt from tax (capital gains from trading domestic exchange-traded derivatives). Therefore, compared to other covered call ETFs, it has a higher tax-saving effect, resulting in a practical increase in the effective dividend yield.

The success of this ETF is attributed to differentiating its underlying assets by investing in domestic high-dividend stocks called ‘PLUS Gobaedangju’ and employing a strategy of selling weekly call options on the KOSPI 200. The underlying asset, PLUS Gobaedangju, is the largest domestic high-dividend stock ETF, characterized by relatively low volatility and downside protection during market downturns. Furthermore, the attractiveness of domestic high-dividend stocks is expanding as government value-up policies, improvements in corporate governance, and shareholder returns by domestic companies intensify efforts to enhance corporate value.

Geum Jeongseop, Head of the ETF Business Division at Hanwha Asset Management, stated, “For monthly dividend covered call ETFs, it is important to maintain the stability of the invested principal while considering long-term upside potential. If the invested principal decreases, even with the same dividend yield, the actual dividend amount decreases, so maintaining the invested principal is essential.”