Effect of Foreign Tax Credit Reform... 'PLUS Gobaedangju' Net Asset Total Surpasses 500 Billion Won

Hanwha Asset Management announced on the 14th that the net asset value of the 'PLUS High Dividend Stock' Exchange-Traded Fund (ETF) has surpassed 500 billion KRW.

According to the Korea Exchange, as of the 12th, the net asset value of PLUS High Dividend Stock was recorded at 501.8 billion KRW. It is the largest dividend stock ETF investing in domestic stocks.

Recently, individual investors have continued to make net purchases of PLUS High Dividend Stock. Approximately 26.9 billion KRW has flowed in net from individuals over the past seven trading days, which is unusual for a dividend stock ETF.

Hanwha Asset Management analyzed that the recent inflow of funds was driven by concerns that distributions from overseas funds and ETFs within tax-advantaged accounts might decrease. Due to recent changes in the foreign tax credit system, there are worries that the tax deferral benefits on distributions from overseas fund investments through pension accounts (retirement pensions, personal pensions) and ISA (Individual Savings Accounts) may be reduced.

Dividend income generated from domestic companies does not incur foreign withholding tax, so when investing in PLUS High Dividend Stock through pension accounts, all dividends received can be fully reinvested without separate taxation. According to financial information provider FnGuide, the total return performance of 'PLUS High Dividend Stock,' considering dividend reinvestment, was 78.5%, 37.3%, and 15.3% over the past 1, 3, and 5 years, respectively.

PLUS High Dividend Stock has been paying stable annualized distributions at a level of 5-6%. The dividend growth rate has averaged 15.4% annually since its listing in 2012. Since May last year, the distribution payment frequency changed from once a year to monthly, paying a fixed amount of 63 KRW per share every month.

The representative constituent stocks include Kia, Industrial Bank of Korea, Woori Financial Group, Samsung Securities, DB Insurance, SK Telecom, and Samsung Card. Financial stocks, considered a major beneficiary sector of value-up, account for about 67%, the highest proportion. It is characterized by diversified investment in high-dividend companies across various sectors such as communication services (12.8%), consumer discretionary (6.3%), consumer staples (5.7%), and energy (3.7%).

Geum Jeong-seop, Head of the ETF Business Division at Hanwha Asset Management, explained, "PLUS High Dividend Stock is composed of domestic leading companies with solid performance and strong cash capacity to pay dividends," adding, "This product invests not in companies that pay high dividends, but in companies that can sustain stable dividends based on excellent performance."