Korea Investment Management Publishes Revised Edition of "ACE ETF Monthly Dividend Guidebook"

Korea Investment Management announced on May 20 that it has published a revised edition of the "ACE ETF Monthly Dividend Investment Guidebook." The revised edition was produced to provide updated information on the domestic and international monthly dividend markets, following the initial publication of the "ACE ETF Monthly Dividend Investment Guidebook" in May of last year.

According to the revised edition, the domestic monthly dividend exchange-traded fund (ETF) market has seen an increase in covered call products over the past year. This is due to the fact that these products offer higher distributions compared to other monthly dividend products by utilizing option premiums, which has attracted significant investor interest. The listing of more than 20 new products utilizing a variety of underlying assets and option strategies over the past year has also contributed to the growing attention.

Korea Investment Management has responded to the heightened investor interest by adding comprehensive information on each asset manager's covered call ETF strategies. In particular, to aid investor understanding, the guidebook compares the characteristics of each strategy rather than simply listing product information, highlighting the differences between products.

The guidebook also addresses changes to the foreign tax credit method. The foreign tax credit is a system that allows domestic tax to be reduced when dividends and interest income generated from overseas assets have already been taxed abroad. Previously, the National Tax Service refunded the foreign tax and then withheld tax at the domestic rate. However, starting this year, only the difference between the overseas and domestic withholding tax rates is additionally charged. Given the increase in investor inquiries following the tax reform, the revised edition summarizes the impact of the tax changes by product.

Five new products have been added to the introduction of the ACE ETF monthly dividend lineup. These include three newly listed ACE US Dividend Quality ETF series and two ETFs that began paying distributions in September of last year: the ACE US Real Estate REITs (Synthetic H) ETF and the ACE Singapore REITs ETF. The three ACE US Dividend Quality ETF series are composed of the ACE US Dividend Quality ETF, the ACE US Dividend Quality Bond Mix 50 ETF, and the ACE US Dividend Quality + Covered Call Active ETF. These products are highly suitable for use in pension accounts, as they aim for both asset growth and dividend income.

Nam Yongsoo, Head of ETF Management at Korea Investment Management, stated, "Over the past year since the first publication of the ACE ETF Monthly Dividend Investment Guidebook, monthly dividend strategies have become more diverse. We prepared the revised edition in light of tax reform issues and other developments." He added, "We hope that the guidebook, which focuses on topics of interest to monthly dividend ETF investors, will be helpful in making investment decisions."

All ACE ETFs are performance-based products, and principal loss may occur depending on investment results.