ACE US Dividend Quality+Covered Call Active ETF, Individual Net Purchases Surpass 20 Billion KRW

Korea Investment Management announced on August 11 that the net purchases by individual investors in the ACE US Dividend Quality+Covered Call Active Exchange-Traded Fund (ETF), which was listed in May, have surpassed 20 billion KRW.

According to the Korea Exchange, as of August 8, the net purchases by individual investors in the ACE US Dividend Quality+Covered Call Active ETF totaled 20.4 billion KRW. Individual investors have consistently shown net buying activity since the ETF was listed. Notably, in the second half of this year, net buying by individuals was recorded on all but two trading days.

The ACE US Dividend Quality+Covered Call Active ETF is an ETF that combines investment in US quality dividend growth stocks with a covered call strategy. US quality dividend growth stocks refer to companies with strong profit-generating capabilities and high potential for future dividend growth. Representative examples include technology stocks such as Microsoft, Nvidia, and Apple, which have started or resumed paying dividends within the past decade.

The covered call strategy is implemented through overseas-listed ETFs. The ETFs included in the portfolio are three types: JEPI (JPMorgan Equity Premium Income ETF), JEPQ (JPMorgan Nasdaq Equity Premium Income ETF), and QYLD (Global X NASDAQ 100 Covered Call ETF). All of these are listed on the London Stock Exchange, so there is no local withholding tax on distributions.

There are also alternative options besides the ACE US Dividend Quality+Covered Call Active ETF. The ACE US Dividend Quality ETF, known as the "Korean version of DGRW (WisdomTree US Quality Dividend Growth ETF)," focuses solely on investing in US quality dividend growth stocks. The ACE US Dividend Quality Bond Mix 50 ETF, which adds a bond allocation and is eligible for 100% investment in pension accounts, was also listed simultaneously in May.

Nam Yongsoo, Head of ETF Management at Korea Investment Management, said, "The ACE US Dividend Quality+Covered Call Active ETF is a product that increases distributions through the covered call strategy while reducing the foreign withholding tax burden for investors. It is suitable for investors seeking an annual target distribution rate of around 7-8% by investing in a dividend growth portfolio centered on technology stocks."

All ACE ETFs are performance-based dividend products, and principal loss may occur depending on investment results.