Two New SOL Palantir Covered Call ETFs to Be Listed

Shinhan Asset Management announced on April 22 that the 'SOL Palantir Covered Call OTM Bond Mix' and 'SOL Palantir US Treasury Covered Call Mix' ETFs, which invest in global AI software leader Palantir and utilize a covered call strategy to pay monthly dividends, will be listed.

These products aim to participate in Palantir's upside while pursuing an annual dividend yield of over 10%. They can be fully invested in retirement pension (DC/IRP) accounts, including personal pension savings, making them highly useful for tax-advantaged accounts.

The SOL Palantir Covered Call OTM Bond Mix ETF is designed to provide high monthly dividends by partially participating in Palantir's stock price appreciation and collecting option premiums. Although actual payouts may vary depending on market conditions and option premium levels, the fund is managed with a target annual distribution rate of around 18%. If there is a surplus in option premiums, special dividends may be paid in addition to the regular monthly dividends.

Kim Gideok, Head of Quant & ETF Management at Shinhan Asset Management, explained, "The SOL Palantir Covered Call OTM Bond Mix ETF sells 103% OTM weekly options, allowing participation in up to approximately 3% of Palantir's weekly stock price gains while simultaneously pursuing monthly dividends." He added, "If Palantir's stock price surges sharply in the short term, returns may be relatively limited, but the high level of monthly dividends is expected to provide a buffer against losses during downturns."

The SOL Palantir US Treasury Covered Call Mix ETF increases the allocation to Palantir up to a maximum of 30% and seeks stable monthly dividends through a covered call strategy based on long-term US Treasuries. While actual payouts may vary depending on market conditions and option premiums, the fund is managed with a target annual distribution rate of around 12% based on the current underlying index.

Kim added, "The SOL Palantir US Treasury Covered Call Mix ETF has the highest allocation to Palantir among domestic ETFs," and introduced it as "suitable for investors who want to maximize their exposure to Palantir in retirement accounts while securing stable cash flow through monthly dividends."

Palantir is a global software company that helps governments and businesses effectively solve complex problems through its big data and AI-based analytics platforms. It offers a variety of solutions, including 'Gotham' for counter-terrorism and cyber threat response, the 'Foundry' platform for supply chain and productivity optimization, 'Apollo' for automated deployment and operation, and 'AIP (AI Platform)' for customized enterprise AI utilization.

Kim commented, "Recently, the AI theme underwent a temporary correction due to increased volatility in global financial markets," but analyzed, "Amid positive trends in corporate demand and earnings, the structural growth story is likely to come back into focus."