Shinhan Asset Management Launches Korea's First Cash Parking Monthly Dividend ETF

Shinhan Asset Management, a pioneer in the domestic ETF market for monthly dividends, announced on the 26th that it will list the first parking-type monthly dividend ETF, ‘SOL CD Interest Rate & Money Market Active’ ETF, on the Korea Exchange.

The SOL CD Interest Rate & Money Market Active ETF primarily utilizes CDs (Certificates of Deposit) and short-term bonds as its main assets, while selectively incorporating short-term credit bonds in its management. It distributes profits monthly in cash, using the income accumulated from short-term coupons and interest from the beginning of the month as the distribution source. For example, if the ETF’s price per share was 50,000 KRW at the beginning of the month and rose to 50,100 KRW by the end of the month, 100 KRW per share would be distributed.

Kim Jeong-hyun, Head of the ETF Business Division at Shinhan Asset Management, introduced, “The SOL CD Interest Rate & Money Market Active ETF is Korea’s first cash parking-type monthly dividend ETF designed to enhance the utilization of cash assets within tax-saving accounts such as ISA, pension savings, and retirement pensions (DC/IRP), and it can be invested in 100% through retirement pension accounts.”

He added, “Compared to holding cash assets in principal-guaranteed products within pension savings CMA or retirement pension accounts, this ETF offers relatively superior performance while generating monthly cash flows. We expect it to help with the efficient management of surplus funds.”

The expected monthly distribution amount can be checked intermittently through the ETF’s price per share. The monthly distributions allow for profit realization and increased liquidity of cash flow. Through the SOL ETF website, investors can check the daily maturity yield to maturity (YTM) in real time, enabling performance comparisons with other short-term bond products in the market.

Kim explained, “From the perspective of long-term investments such as pensions, it is important to hold a certain portion of contributions in cash to respond to temporary market events and phases of increased volatility.”

The first distribution of the SOL CD Interest Rate & Money Market Active ETF is scheduled for January 2, 2025, and the deposit time of the distribution may vary depending on the policies of securities firms.