KB Asset Management Launches Two New Weekly Covered Call ETFs

KB Asset Management announced on September 2 that it will launch two new weekly covered call exchange-traded funds (ETFs) investing in domestic value stocks and Chinese growth stocks.

The RISE China Tech TOP10 Weekly Target Covered Call ETF and the RISE Korea Value Up Weekly Fixed Covered Call ETF are designed to use Chinese leading growth stocks and undervalued domestic value stocks as underlying assets, aiming to provide volatility buffering, stable income, and growth potential at the same time.

Last year, KB Asset Management attracted attention by launching the industry’s first “RISE 200 Weekly Covered Call ETF,” which utilizes a weekly covered call strategy by selling call options with maturities of less than one week. Over the past year, the ETF achieved a dividend yield of 16.4%, demonstrating faster responsiveness and higher premium collection compared to monthly strategies. Building on this performance, the company has now expanded the covered call strategy to Chinese tech growth stocks and Korean value stocks.

The RISE China Tech TOP10 Weekly Target Covered Call ETF is a product that actively participates in the momentum of Chinese tech stocks by focusing investments on 10 technology-related stocks within the communication, technology, and consumer discretionary sectors.

With the rise of AI startup DeepSeek and the government’s “AI+ Initiative” policy, the growth of major Chinese tech companies is once again drawing attention. The RISE China Tech TOP10 Weekly Target Covered Call ETF focuses its investments on 10 key stocks, including Tencent (18.1%), Xiaomi (15.4%), and Alibaba (14.8%).

Unlike the existing Hang Seng Tech Index, which restricts investments in leading stocks due to weighting limitations, the index tracked by this product more boldly allocates to representative companies.

A “weekly target covered call strategy” has been introduced, selling at-the-money (ATM) Hang Seng Tech call options every week, aiming to pay monthly distributions at an annual rate of around 12%. This allows investors to pursue both the growth of Chinese tech stocks and stable income simultaneously.

The RISE Korea Value Up Weekly Fixed Covered Call ETF is designed in response to recent amendments to the Commercial Act and expectations for resolving the Korea Discount, which have led companies to strengthen shareholder return policies.

The underlying “Korea Value Up Index” reflects value stock selection indicators such as market representativeness, shareholder return performance, price-to-book ratio (PBR), and return on equity (ROE).

Unlike traditional covered calls, which sell options on 100% of holdings, the “RISE Korea Value Up Weekly Fixed Covered Call ETF” fixes the option selling ratio at 30% and secures up to 70% upside participation through a “fixed covered call strategy.” This results in a balanced portfolio that not only provides stable income but also offers opportunities for stock price appreciation over the long term.

No Areum, Head of the ETF Business Division at KB Asset Management, introduced the products by saying, “By combining the covered call strategy with both value and growth stocks as underlying assets, we have enabled investors to choose products according to their investment preferences.” She added, “If you prioritize stability and dividends, the Korea Value Up Weekly Fixed Covered Call ETF is worth considering, while those seeking Chinese advanced industry growth momentum should pay attention to the China Tech TOP10 Weekly Target Covered Call ETF.”