TIGER US Dividend Dow Jones Covered Call Series 3 Types, Total Net Assets Surpass 1 Trillion Won

Mirae Asset Global Investments announced on the 8th that the total net assets of the three 'TIGER US Dividend Dow Jones Covered Call ETFs' have surpassed 1 trillion KRW.

According to the Korea Exchange, the net assets of the TIGER US Dividend Dow Jones Target Covered Call No. 2 ETF, Korea's first target covered call ETF, amount to 913.6 billion KRW. It is the largest among the 32 equity covered call ETFs listed domestically.

The TIGER US Dividend Dow Jones Target Covered Call No. 2 ETF invests in SCHD, a representative US dividend stock ETF, and utilizes a covered call strategy to expect an annual distribution yield of 10%. Since its listing in June 2023, it has demonstrated steady dividend growth through the target covered call strategy, making it a popular choice among covered call investors. After paying its first distribution of 89 KRW, it paid 96 KRW last month, showing approximately 7% dividend growth in less than two years.

Based on stable blue-chip stock investments, it employs options with monthly maturities to maintain solid market defense capabilities. This structure enhances downside protection when uncertainty in growth stocks is high. In fact, despite shocks such as the deep-sea crisis and Trump's tariff war, the TIGER US Dividend Dow Jones Target Covered Call No. 2 ETF fell by -8.2% year-to-date as of the 7th. This performance outperformed the average -17.5% decline of US S&P 500 index investment ETFs listed domestically (on a currency-exposed basis).

The TIGER US Dividend Dow Jones Target Covered Call No. 1 ETF and the newly listed TIGER US Dividend Dow Jones Target Daily Covered Call ETF in January are also gaining attention as covered call ETFs that enjoy both dividends and growth. They set the distribution record date on the 15th of every month, allowing them to be used as a biweekly dividend portfolio. As of the 7th, their net asset sizes are 67.8 billion KRW and 138.4 billion KRW, respectively.

Investors in covered call ETFs need to have a precise understanding of the covered call strategy and distributions before investing. It is important to consider the total return of the ETF, not just the high distribution rate. The distribution source of covered call ETFs is the option premium, so if the performance of the underlying assets and option strategies is poor, there is a risk of reduced distributions and long-term principal erosion.

Yoon Byung-ho, Head of the Strategic ETF Management Division at Mirae Asset Global Investments, stated, "As demand for covered call ETFs is expanding recently, the importance of sustainable dividends through a proper balance of capital gains and income is increasing." He added, "We will strive to establish the TIGER US Dividend Dow Jones Covered Call ETF as an ETF that can steadily increase distributions based on consistent capital gains."