KODEX Shareholder Return High Dividend ETF Newly Listed

With the government's announcement of tax reform plans and the strengthening of shareholder-friendly policies through amendments to the Commercial Act, the expansion of dividend payout ratios by companies and the resulting "high-dividend stock money move" have emerged as key topics in this year's stock market.

On January 20, Samsung Asset Management announced the listing of a new "KODEX Shareholder Return High Dividend" ETF, which reflects the domestic shareholder return trend.

This ETF breaks away from the traditional approach of simply including stocks with high dividend yields and instead selects only high-quality companies that meet the government's new shareholder return policy standards. Specifically, the inclusion criteria require companies not to have reduced their cash dividends compared to the previous year. Eligible companies must either have a dividend payout ratio of at least 40%, or a dividend payout ratio of at least 25% along with a dividend increase of more than 10% compared to the previous year. Among companies that meet these conditions, the top 30 stocks with the highest shareholder return yields are further selected.

The most distinctive feature is its design to respond sensitively to policy changes. As part of efforts to protect shareholder rights, the government is pushing for a "mandatory treasury stock cancellation" through the third amendment to the Commercial Act. Consequently, an increasing number of companies are deciding to buy back and cancel treasury shares to enhance shareholder value. This directly benefits shareholders by reducing the number of shares in circulation and increasing the value per share.

The KODEX Shareholder Return High Dividend ETF is structured so that companies that have announced share buybacks and cancellations account for up to 55% of the total portfolio. The strategy is to pursue not only dividend income but also capital gains from stocks expected to show positive price movements due to active shareholder return policies.

The ETF is also designed to include companies implementing "capital reduction dividends," which have recently been introduced. A capital reduction dividend is paid from funds generated by reducing a company's capital reserve, and for ordinary shareholders, it is tax-exempt and excluded from the comprehensive financial income tax base. Capital reduction dividends are increasingly being used as a new tool for enhancing shareholder value, and general investors can expect a real increase in dividend yield through these tax-exempt dividends.

The ETF pays monthly dividends, with the 15th of each month as the record date. When combined with typical monthly dividend ETFs that pay at the end of the month, investors can establish a sophisticated dividend system that pays out twice a month.

Moon Hyunwook, manager at Samsung Asset Management, explained, "With this year's policy changes, the effect of a full-fledged money move makes domestic dividend stock investment strategies more important than ever."

He added, "Separate taxation of dividend income is applied only to the dividends of individual companies for a limited period of three years. Regardless of the inclusion of high-dividend stocks, investors should be aware that distributions from collective investment schemes are excluded from separate dividend income taxation."