SOL Financial Holding Plus High Dividend ETF Shows Strong Returns Since Start of Year

With the inauguration of President Lee Jaemyung, the amendment of the Commercial Act is expected to proceed in earnest, leading to growing investor interest in financial holding companies.

Shinhan Asset Management announced on the 5th that the 'SOL Financial Holding Plus High Dividend' ETF has recorded a return of 33.45% since the beginning of the year. This is the highest return among domestic high-dividend ETFs.

The SOL Financial Holding Plus High Dividend ETF is composed of 10 stocks, including nine leading domestic financial holding companies such as Shinhan Financial Group, KB Financial Group, Hana Financial Group, and Woori Financial Group, as well as NH Investment & Securities. It is a product that allows focused investment in domestic financial holding companies.

Since its listing in June last year, it has provided an average monthly dividend of 51 KRW per share, resulting in an annualized dividend yield of approximately 5.66%.

Kim Junghyun, Head of the ETF Business Division at Shinhan Asset Management, stated, "If the Commercial Act amendment is implemented in earnest, various shareholder return policies such as dividend increases, protection of minority shareholders, and treasury stock cancellations will come to the fore, raising expectations for enhanced shareholder value at financial holding companies." He added, "Financial holding companies have been the most proactive sector in responding to government system improvements and the advancement of the financial market, so they are highly likely to emerge as key beneficiaries of the Commercial Act amendment."

The amendment to the Commercial Act is expected to have a particularly positive impact on financial holding companies. For financial holding companies, where long-term investors such as the National Pension Service and foreign institutional investors account for a high proportion, the codification of directors' fiduciary duties helps to check decision-making centered on major shareholders and protects the rights and interests of minority shareholders. This can further enhance the transparency of corporate governance. In addition, given the structure of financial holding companies that rely on dividends from subsidiaries for income, strengthening shareholder rights could lead to increased dividends from subsidiaries.

Kim further emphasized, "The SOL Financial Holding Plus High Dividend ETF is centered on financial holding companies, but it also has the advantage of selectively including stocks with a high potential for improved dividend policies based on treasury stock purchase history and expected dividend yield data." He explained, "Through a differentiated composition from existing bank ETFs or simple high-dividend ETFs, investors can expect not only dividends but also an increase in shareholder value and capital gains."