KODEX High Dividend Stocks Revamps Portfolio to Focus on Large-Cap Blue-Chip High Dividend Stocks

Samsung Asset Management announced on June 18 that it has completely revamped the portfolio selection method for the KODEX High Dividend ETF, shifting its focus from primarily small- and mid-cap stocks to large-cap blue-chip stocks.

Along with the revision of the index methodology, the ETF's name will also be changed to 'KODEX High Dividend Stocks.' The intention is to reach customers with a new product name, reflecting the upgrade compared to the previous product through the portfolio overhaul.

KODEX High Dividend Stocks will be composed of stocks that are actually seeing active capital inflows in the market, as well as sectors that are more sensitive to economic cycles compared to other high dividend ETFs. The asset rebalancing has been completed in a way that is expected to provide greater upside potential during market rallies.

There has been a change in the stock selection method. Previously, stocks were selected based on the previous year's dividend yield, but after the revision, stocks are chosen based on the expected dividend yield for the next fiscal year (FY1). This introduces a proactive investment strategy based on the future dividend yield that investors can actually receive.

A representative from Samsung Asset Management explained, "Based on our analysis of past data, applying the expected dividend yield for FY1 resulted in an average annual excess return of about 3.8% compared to using the previous year's dividend yield," adding, "The dividend yield has also been raised from 5% to 6%."

The weighting strategy has also changed from the previous equal-weighted structure of 50 stocks to a concentrated portfolio of 20 stocks. By focusing on companies with higher expected dividend yields among high dividend stocks, it is possible to achieve even higher performance during periods of rapid KOSPI index growth.

Whereas the previous KODEX High Dividend ETF focused on financial stocks, the revamped version will now concentrate on leading high dividend stocks from a more diverse range of sectors. Key constituents include Hyundai Elevator, Kia, DB Insurance, SK Telecom, and Cheil Worldwide. For financial stocks, particularly banks, stock prices have already risen significantly since 2024 due to heightened expectations for shareholder returns, which may make further gains difficult. In contrast, high dividend stocks excluding banks have seen relatively less appreciation, and are considered to have further upside potential if the domestic and global economies improve.

Samsung Asset Management manager Ma Seunghyun said, "Rather than tracking past dividend data, we select outstanding companies with high dividend yields that are aligned with market consensus by utilizing expected dividend yields." He added, "As an ETF with a proactive approach, it can be a suitable choice for investors seeking both dividends and growth potential."