Samsung Asset, Two Dividend Stock ETFs Switch to Quarterly Payouts

[Asia Economy Reporter Junho Hwang] Samsung Asset Management announced on the 25th that it will change the dividend payment method of two ETFs, 'Samsung KODEX High Dividend ETF' and 'Samsung KODEX Dividend Value ETF,' from annual payments to quarterly payments.

The shift from annual to quarterly payments was made to meet the demand of investors who want to secure cash flow more frequently. As volatility in the financial markets has increased recently, investors' interest in securing a certain level of cash flow regardless of stock market movements has grown. This also aligns with the demand of investors who actively manage personal assets or pensions and seek interest and dividend income beyond earned income.

Although quarterly dividends were previously small and most payments were made annually, the number of companies paying quarterly dividends in the KOSPI has increased recently, securing dividend resources. Samsung Asset Management explained that especially for domestic dividend ETFs, many stocks expected to pay meaningful quarterly dividends compared to other ETFs are included, making them the first candidates for this transition.

The Samsung KODEX High Dividend ETF invests in domestic dividend stocks with high dividend yields and low volatility. It tracks the FnGuide High Dividend Plus Index as its benchmark. Listed in October 2017, this ETF's top holdings include ▲SeAH Special Steel, ▲Daishin Securities Preferred, ▲Samsung Fire & Marine Insurance Preferred, and ▲Industrial Bank of Korea, with net assets of approximately 38.1 billion KRW. Since the base date including dividends, the adjusted NAV-based return is 9.1% (FnGuide adjusted NAV as of 22.10.21), while the KOSPI index return for the same period was -10.8%. The annual per-share dividends for the past three years were 290 KRW in 2020, 440 KRW in 2021, and 490 KRW in 2022.

The Samsung KODEX Dividend Value ETF invests mainly in large-cap domestic stocks with high dividend yields and strong value and profitability indicators, tracking the FnGuide SLV Dividend Type Index. This index includes the top 150 stocks with excellent dividend-related indicators among the top 500 by market capitalization. Listed in May 2019, this ETF's top holdings include ▲Samsung Electronics, ▲LG Chem, ▲SK Hynix, and ▲Kia, with net assets reaching 138.6 billion KRW. Since inception, the return is 18.7% (FnGuide adjusted NAV as of 22.10.21), while the KOSPI index return for the same period was 8.6%. The annual per-share dividends for the past three years were 270 KRW in 2020, 340 KRW in 2021, and 385 KRW in 2022.

The first quarterly dividends for these ETFs will be paid in November, with the first dividend record date on October 31. Investors aiming to receive dividends should purchase by October 27. Dividend payments are expected to be made within seven business days from the next business day after the record date.

Jaeuk Jung, head of ETF Operations Team 3 at Samsung Asset Management, said, "Changing the dividend payment frequency of these two domestic dividend ETFs from once a year to quarterly is to meet the demand of pension investors who are particularly interested in securing cash flow." He added, "Samsung Asset Management will continue to make various attempts to broaden investment choices for investors."

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