"Ex-Dividend Date on the 29th"... Should You Sell or Hold Before the Ex-Dividend Date?

[Asia Economy Reporter Lee Seon-ae] An investment opinion has emerged that it is more advantageous to hold stocks and receive dividends than to sell stocks before the ex-dividend date. This is based on the judgment that the dividend yield is greater than the stock price decline caused by the ex-dividend date. The ex-dividend date refers to the day when the right to receive dividends disappears. This year's ex-dividend date is the 29th, so shareholders of companies with December fiscal year-end must hold stocks until the 28th to secure their rights.

On the 25th, Lee Jeong-bin, a researcher at Shinhan Financial Investment, said, "For both KOSPI and KOSDAQ, it is more advantageous to hold stocks than to sell before the ex-dividend date in terms of actual dividend yield (dividend yield minus ex-dividend effect)," adding, "The actual dividend yield of KOSPI has averaged 1.15%p since the financial crisis, and KOSDAQ has averaged 1.21%p, which means that the dividend yield is greater than the index decline caused by the ex-dividend date."

He also said, "From the perspective of dividend yield, a passive strategy tracking KOSPI is effective, but from the perspective of capital gains, KOSDAQ's returns are expected to be better than KOSPI's," adding, "This is because there is a seasonal upward trend for about a month after the ex-dividend date due to the 'January Effect.'"

He further advised, "After December 29, 2021, it is necessary to expand the weighting of the 'KODEX KOSDAQ150 Leverage' strategy," and "In January, energy, materials, industrials (cyclical stocks), healthcare, and IT sectors are advantageous."

When breaking down by sector, the sectors expected to outperform in January are securities, shipbuilding, energy, chemicals, and semiconductors (based on the entire period). The sectors that outperform differ depending on whether KOSPI rises or falls. When the overall market rises, the sectors expected to outperform are securities, energy, chemicals, shipbuilding, and semiconductors. Generally, the sectors for the entire period (including both rising and falling periods) and the rising period are similar. On the other hand, when the overall market falls, the sectors expected to outperform are healthcare, communication services, utilities, transportation, and media & education. In terms of size, small-cap stocks performed well in both KOSPI and KOSDAQ, and the style effect relatively decreased. Looking at the entire market, KOSDAQ's returns were on average better than KOSPI's.

This content was produced with the assistance of AI translation services.