ACE High Dividend ETF to Be Newly Listed

Korea Investment Management announced on December 15 that it will list the ACE High Dividend Stock Exchange Traded Fund (ETF) as a new product on December 16.

The ACE High Dividend ETF is a domestic equity product that tracks the 'KRX-Akros High Dividend 20 Index (Market Price)', which is calculated and published by the Korea Exchange. This index includes 20 stocks, selected not only for market representativeness and liquidity but also by comprehensively considering dividend yield, payout ratio, and profitability (ROE).

The ACE High Dividend ETF reflects the 'ex-dividend recovery rate.' A low ex-dividend recovery rate indicates that a company has paid excessive dividends relative to its fundamentals, requiring investors to bear a loss in total return due to a drop in share price even after receiving dividends. The ETF’s strategy is to seek both dividend income and capital gains by selectively investing in stocks with a strong ex-dividend recovery rate.

The difference in performance depending on whether the ex-dividend recovery rate is reflected is significant. According to a simulation using the ETF's underlying index, from November 2023 to May 2025, the return after removing stocks with low ex-dividend recovery rates outperformed the return without such removal across all periods. In some periods, the gap exceeded 5 percentage points (P).

Distributions are paid monthly. The source of the distributions consists of dividend income from stocks held by the ETF and realized capital gains from portfolio rebalancing. The record date for distributions is the last business day of each month, and details such as the distribution amount can be checked on the ACE ETF website and blog.

Nam Yongsoo, Head of ETF Management at Korea Investment Management, explained, "As government-led efforts to improve the structure of the domestic stock market continue, demand for investment in domestic high-dividend stocks is increasing." He added, "For companies that excessively increase dividends to comply with government policies, there is a high risk of undermining corporate value. Therefore, it is necessary to invest in high-dividend stocks that reflect the ex-dividend recovery rate, such as the ACE High Dividend ETF."

Nam also noted, "The ACE High Dividend ETF, which compresses its portfolio to 20 stocks by considering corporate profitability, dividend growth, and post-ex-dividend price recovery, is well-suited for use in retirement accounts."

The ACE High Dividend ETF can be invested in up to 70% of defined contribution (DC) and individual retirement pension accounts. As a performance-based product, past performance does not guarantee future results. In addition, principal loss may occur depending on management results, so investors should exercise caution.