ACE US Dividend Quality+Covered Call Active ETF Surpasses 10 Billion KRW in Net Individual Purchases

Korea Investment Management announced on July 7 that the net purchases by individual investors in the 'ACE US Dividend Quality+Covered Call Active Exchange Traded Fund (ETF)' have surpassed 10 billion KRW since its listing.

According to the Korea Exchange, the ACE US Dividend Quality+Covered Call Active ETF recorded net purchases by individual investors of 10.5 billion KRW on June 30. This marks the first time the amount has exceeded 10 billion KRW since its listing on May 13, 2025. As of the closing price on July 4, the net purchases by individual investors totaled 11.4 billion KRW. The recent inflow of funds is attributed to growing interest in 'dividend+income' strategies within the ETF market.

The ACE US Dividend Quality+Covered Call Active ETF is characterized by combining US-listed stocks with high dividend growth potential and a covered call strategy. It is based on the 'ACE US Dividend Quality ETF,' which benchmarks the WisdomTree US Quality Dividend Growth ETF (DGRW), a leading US dividend growth ETF, and incorporates global covered call ETFs. Approximately 40% of the total assets are invested in stocks with expected dividend growth, while the remaining 60% consists of three of the world's most popular covered call ETFs. As a monthly distribution product, it paid its first distribution after listing on July 2.

Another notable feature is that actual investor feedback was reflected during the product design process. Before launching the ETF, Korea Investment Management conducted surveys and interviews with around 500 individual investors to actively reflect investor demand for 'dividend yield,' 'tax efficiency,' 'distribution cycle,' and 'cost structure.' The design also took into account the strong demand for investing through tax-advantaged pension accounts.

Recently, the ETF's portfolio underwent rebalancing. The previous composition was JEPI (20%), JEPQ (20%), and ACE US 500 Covered Call ETF (20%). As of June 24, QYLD (10%) was newly included, and the allocations to JEPI and JEPQ were each increased to 25%. QYLD ranks third globally among covered call ETFs by net asset size, with approximately 1.2 trillion KRW. With this change, the ETF now diversifies investments across the top three global covered call ETFs.

There are significant tax advantages when using the ETF in Individual Savings Accounts (ISA) or pension accounts. About half of the total assets are managed through UK-listed ETFs, which do not withhold taxes on distributions. In ISA or pension accounts, distributions can be received without foreign withholding tax. In addition, in domestic accounts, the timing of taxation is deferred, which is advantageous in terms of after-tax returns.

Nam Yongsoo, Head of ETF Management at Korea Investment Management, stated, "There is a growing demand to invest efficiently in overseas high-dividend ETFs," and explained, "This ETF is a product that combines US dividend growth stocks with income strategies."

He added, "The ACE US Dividend Quality+Covered Call Active ETF is suitable for long-term investment strategies, as it offers both tax-saving benefits and diversification within ISA and pension accounts. Its monthly distribution structure also makes it ideal for investors seeking regular cash flow."

The ACE US Dividend Quality+Covered Call Active ETF is a performance-based product, and past performance does not guarantee future results. Investors should also be aware that principal loss may occur depending on investment outcomes.