PLUS Share Buyback High Dividend ETF to Be Newly Listed

A "Complete" Shareholder Return Model Combining Dividends and Share Buybacks
"Value-Up" Policies Accelerate, Including Mandatory Share Cancellation
Investment Strategy Targets Stock Price Growth Through Buybacks and Cancellations

Hanwha Asset Management will launch the "PLUS Share Buyback High Dividend ETF" on September 16, an exchange-traded fund that invests by considering both dividend yields and share buyback ratios.

The PLUS Share Buyback High Dividend ETF diversifies its investments among the top 30 companies listed on the KOSPI, selected based on their "total shareholder return rate," which is the sum of their expected dividend yield and their share buyback ratio over the past year. As the Korea Value-Up Program shifts the domestic stock market paradigm toward total shareholder return, the strategy goes beyond traditional dividend-focused shareholder rewards to also reflect active share price support through share buybacks and cancellations in its investment performance.

Recent government policies such as mandatory share cancellation after buybacks and the separate taxation of dividend income are key measures aimed at addressing the undervaluation of the domestic stock market and establishing an advanced shareholder return culture. Share buybacks followed by cancellation are considered the most direct way to boost share prices by reducing the number of shares in circulation and increasing earnings per share (EPS), raising expectations that this will become a practical means of enhancing shareholder value.

The PLUS Share Buyback High Dividend ETF is a product optimized for changing market conditions. In addition to traditional high-dividend stocks, it can also include companies in its portfolio that may not offer high dividend yields but actively enhance shareholder value through share buybacks. A representative example is Meritz Financial Group, which shifted its shareholder return policy focus from dividends to share buybacks, resulting in a rise in its share price. Many investors were disappointed when Meritz Financial Group was excluded from traditional high-dividend ETFs.

Apple in the United States is another example, having bought back approximately $915 billion worth of its own shares over 13 years since 2012, driving its share price up more than twelvefold. This demonstrates that explosive share price growth is possible when stable profit generation is combined with increased per-share value through share buybacks.

The PLUS Share Buyback High Dividend ETF is a "mid-month dividend" ETF that pays out distributions at an annual rate of around 4% in the middle of each month. By also investing in the "PLUS High Dividend ETF," which pays distributions at the end of the month, investors can receive payouts twice a month-once mid-month and once at the end of the month. This allows for regular cash flow or the potential to maximize compound returns through reinvestment, supporting a variety of investment strategies.

Kim Jeongseop, Head of the ETF Division at Hanwha Asset Management, explained, "Government policies are driving the paradigm of shareholder returns in the domestic stock market from a dividend-centric approach to total shareholder return, including share buybacks."

He further introduced the PLUS Share Buyback High Dividend ETF as a "comprehensive shareholder return investment product that simultaneously pursues stable income through dividends and capital gains through share buybacks."

He added, "As a core asset that will grow over the long term alongside structural improvements in the domestic stock market, it will be the optimal solution for investors seeking both stable cash flow and asset growth."