SOL US 30-Year Treasury Covered Call ETF Surpasses 300 Billion Won in Net Assets

Shinhan Asset Management announced on August 27 that the net asset value of the 'SOL US 30-Year Treasury Covered Call ETF' has surpassed 300 billion won. Among products with the same strategy, this ETF has posted top-tier returns and distribution rates, leading to a rapid increase in purchases by individual investors.

Since the beginning of this year, individual investors have made a net purchase of approximately 80 billion won. As the US Federal Reserve has kept its benchmark interest rate unchanged for five consecutive meetings and hinted at the possibility of a rate cut in September, volatility in long-term bonds has increased. The balance of US bonds held by domestic investors recently reached an all-time high, doubling last year's annual volume. There has also been a surge in buying interest for ETFs related to long-term bonds.

The SOL US 30-Year Treasury Covered Call ETF recorded a 7.57% return over the past three months, ranking first among products with the same strategy in the market. It has also paid an average monthly distribution of 120 won this year. The annualized dividend yield reached 14.90%. Since its listing at the end of 2023, it has maintained a monthly distribution rate of over 1% and an annual rate of over 12%.

Kim Junghyun, Head of the ETF Business Division at Shinhan Asset Management, stated, "In periods of rapidly falling interest rates, long-term bond ETFs can deliver relatively higher performance. However, in the current environment of heightened volatility, the covered call strategy is even more effective."

He added, "The SOL US 30-Year Treasury Covered Call ETF is being recognized as the most efficient alternative, achieving top-tier results in both performance and distribution rates."

The SOL US 30-Year Treasury Covered Call ETF seeks stable monthly dividends by investing in long-term US Treasury bonds while simultaneously selling call options and using the option premiums as a source for distributions. The covered call strategy involves holding the underlying asset while selling call options, which helps cushion losses during declines and limits gains to a certain level during upswings.