RISE Daily Fixed Covered Call Series Surpasses 200 Billion KRW in Net Assets

KB Asset Management announced on June 18 that the RISE Daily Fixed Covered Call Exchange Traded Fund (ETF) series has surpassed 200 billion KRW in net assets just eight months after its launch.

Amid rising volatility in global financial markets, individual investors are increasingly interested in this series, which aims to provide both stable monthly distributions and growth potential.

The RISE Daily Fixed Covered Call ETF series consists of three products: RISE US Tech 100 Daily Fixed Covered Call, RISE US AI Value Chain Daily Fixed Covered Call, and RISE US Dividend 100 Daily Fixed Covered Call.

Covered call ETFs are representative strategic products that combine underlying stocks with call option writing to provide income returns. However, they have structural limitations, such as capped returns during bull markets and fluctuating market participation rates due to fixed target distribution rates.

KB Asset Management has introduced a "third-generation covered call" strategy, in which call options are sold daily but the selling ratio is fixed at 10% of the underlying assets. This design allows the fund to maximize call option premium income during periods of heightened market volatility while tracking over 90% of the underlying index's gains. The fund simultaneously pursues two objectives: income (monthly distributions) and growth (capital gains).

The RISE Daily Fixed Covered Call series differentiates itself through both its product strategy and the design of its underlying indices. The RISE US Tech 100 Daily Fixed Covered Call diversifies investments across 100 US-listed tech companies and sells 10% of Nasdaq 100 call options daily to provide monthly distributions.

The RISE US AI Value Chain Daily Fixed Covered Call invests in 15 leading US artificial intelligence (AI) value chain companies. Rather than simply selecting the largest companies by market capitalization, it carefully chooses representative companies in the hardware, software, and service & infrastructure sectors.

The RISE US Dividend 100 Daily Fixed Covered Call invests in 100 US-listed dividend growth stocks that have paid dividends for more than 10 years, and employs a strategy of selling S&P 500 call options to pursue both stability and income.

Lee Sujin, Head of ETF Product Marketing at KB Asset Management, introduced the RISE Daily Fixed Covered Call ETF series as "a product that reflects the needs of a wide range of investors, from those seeking regular cash flow, to seniors preparing for retirement, to younger generations looking for supplemental living expenses." She added, "We plan to continue expanding our ETF lineup utilizing the fixed covered call strategy in the future."