TIGER Dividend Covered Call Active ETF, 3-Month Return Tops Covered Call ETFs

Mirae Asset Global Investments announced on the 11th that the ‘TIGER Dividend Covered Call Active ETF’ recorded the highest 3-month return among covered call ETFs listed in Korea.

According to the Korea Exchange, as of the 10th, the ‘TIGER Dividend Covered Call Active ETF’ posted a 3-month return of 8.2%, the highest among 38 covered call ETFs listed domestically.

The TIGER Dividend Covered Call Active ETF invests in high-quality domestic companies with dividend growth potential using a covered call strategy. As an active ETF, it flexibly adjusts the proportion of call option sales and strike prices according to market trends. To manage the risk of the covered call strategy amid the stock market rebound since the beginning of the year, it reduced the proportion of call option sales to about half. By foregoing some option premiums, it has accumulated more capital gains, resulting in excellent returns.

It is characterized by a balanced pursuit of capital gains and dividend income. Instead of focusing on stocks or sectors with high dividend yields, it concentrates on dividend growth stocks that consistently expand shareholder returns through dividend payments and share buybacks driven by steady earnings growth. This year, it actively included stocks such as Hanwha Aerospace and SK Hynix, which have higher growth potential than dividend yields, generating excess returns.

Yoon Byung-ho, Head of Strategy Operations at Mirae Asset Global Investments, explained, "Due to significantly lower liquidity in the domestic options market compared to the U.S. market, an active strategy that can flexibly respond to market conditions is more effective than a passive strategy for domestic covered call products." He added, "We aim to enable special dividends through excess performance in the stock portfolio," and said, "Based on this year’s excellent returns, we are planning a special dividend at the end of this quarter."

Yoon also advised, "Option premium income from domestic covered call ETFs is an important means of generating tax-free cash," but cautioned, "Pursuing excessive premiums can damage the returns of the covered call strategy and increase the risk of principal loss." He emphasized, "It is important to choose products that can improve performance through an active covered call strategy while providing an appropriate level of distributions."

The TIGER Dividend Covered Call Active ETF is managed with the same strategy as the ‘Mirae Asset Dividend Covered Call Active Fund,’ which has a stable performance record of over 10 years. Since its inception in 2012, the Mirae Asset Dividend Covered Call Active Fund has consistently outperformed its benchmark and is one of Mirae Asset’s representative public funds.