Shinhan Asset Management Launches 'Korean Version of SCHD'... Investment via Pension Accounts

[Asia Economy Reporter Junho Hwang] Shinhan Asset Management, which opened a new trend in the domestic ETF market by launching the country's first monthly dividend exchange-traded fund (ETF), is listing the 'Korean version of SCHD' as its second monthly dividend product.

'SOL US Dividend Dow Jones,' scheduled to be listed on the 15th, is an ETF that tracks the 'Dow Jones US Dividend 100 (PR) Index' and pays monthly dividends.

It is the same product as the Schwab US Dividend Equity ETF (SCHD, hereafter SCHD), a representative US dividend growth ETF. Dividends will be paid monthly starting from January next year.

Junghyun Kim, Head of ETF Management Center at Shinhan Asset Management, said, "Rather than simply converting the existing ETF to monthly dividends, we considered from the product planning stage which strategy is suitable for a monthly dividend structure, resulting in the launch of 'SOL US Dividend Dow Jones' this time." He explained, "SCHD has a long-term stable dividend yield, ranks among the top US dividend strategy ETFs in terms of average annual dividend growth rate, and has sufficient resources to pay monthly distributions, making it suitable for a monthly dividend structure."

SCHD, listed in October 2011, is a mega ETF with a net asset value of $40.984 billion as of the closing price on the 9th, equivalent to 55.9 trillion KRW. It is the 27th largest among more than 3,000 ETFs listed in the US market.

In particular, it recorded the highest fund inflow among dividend strategy ETFs this year with $11.9 billion newly invested. It is also the top product in net purchases of overseas dividend ETFs by domestic investors, with $142 million.

The underlying index, the Dow Jones US Dividend 100 Index, has maintained a stable dividend yield in the mid-3% range. It is expected to yield about 3.6% this year and about 3.8% next year.

Kim said, "One of the biggest regrets of SCHD investors was that it could not be invested in pension accounts, but now with 'SOL US Dividend Dow Jones,' you can invest and receive monthly dividends through tax-advantaged accounts such as personal pensions, retirement pensions, and brokerage-type ISAs." He emphasized, "In terms of fees, it is structured to be suitable for long-term investment by setting the lowest level among domestically listed dividend strategy ETFs."

Kim added, "In pension accounts, core assets can be diversified with 'SOL US S&P500' and 'SOL US Dividend Dow Jones,' adjusting the ratio to 7:3, 5:5, or 3:7 according to investment preferences to build a portfolio." He recommended, "It is also advisable to combine this with a strategy of using the monthly dividends to invest in thematic ETFs such as electric vehicles & secondary batteries and semiconductors to pursue alpha returns."

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