KB Asset Management announced on July 29 that the net asset value of its KOSPI200-tracking monthly dividend exchange-traded fund (ETF), the 'RISE 200 Weekly Covered Call ETF,' has surpassed 400 billion won.
As the KOSPI index continues to fluctuate around the 3,200 mark, market caution is growing due to external factors such as Korea-US trade negotiations and tax law revisions. There is a rising trend in demand from investors seeking stable cash flows. Monthly distribution ETFs utilizing covered call strategies are considered representative investment vehicles that meet this need.
The 'RISE 200 Weekly Covered Call ETF,' which KB Asset Management listed in March last year, is a covered call ETF based on domestic stocks. At the time of its launch, it attracted attention as the first in Korea to introduce a 'weekly covered call' strategy, which involves selling call options with maturities of less than one week.
Word has spread that an investor who puts 100 million won into the 'RISE 200 Weekly Covered Call ETF' can receive over 1 million won in distributions within a month, leading to continued buying by individual investors.
As of the end of last month, the distribution rate was 1.51%. This means that an investor who invested 100 million won in May could have received over 1.5 million won in distributions within a month. The taxable standard amount per share is 2 won, with the majority of returns structured as non-taxable income.
Over the past year, KB Asset Management has paid a total distribution of 1,518 won per share. The average monthly distribution rate stands at 1.42%, with a cumulative distribution rate reaching 17.09%.
Unlike conventional monthly covered call ETFs, which sell call options once a month, the 'RISE 200 Weekly Covered Call ETF' sells call options a total of eight times each month, every Monday and Thursday. This enables the fund to collect higher call option premiums compared to monthly covered call strategies. Its performance has also been strong, recording a 23.23% return over the past three months as of July 28.
No Areum, head of the ETF Business Division at KB Asset Management, stated, "Although the 'RISE 200 Weekly Covered Call ETF' was initially dominated by dividend-focused older investors, the investor base is diversifying as more people in their 40s and 50s with pension accounts, as well as MZ generation investors, are joining." She added, "This is a highly recommended product for investors of all ages who are seeking stable monthly cash flows."
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