Daol Asset Management Launches 'Public Offering High-Yield Maturity Fund' with Separate Taxation Applied

Daol Asset Management has launched the ‘Daol Public Offering High-Yield Maturity Securities Investment Trust,’ which offers separate taxation and priority allocation benefits for public offering stocks.

From June 12, the amendment to the Restriction of Special Taxation Act, granting separate taxation benefits to high-yield funds, came into effect. The tax benefits for high-yield funds, which expired in 2017, have been revived after five years. According to the amendment, if you subscribe to a high-yield fund by the end of 2024, the interest income and dividend income generated by the fund will not be included in comprehensive income but will be subject to a final withholding tax rate of 15.4%. The benefit applies for three years from the subscription date, with a subscription limit of 30 million KRW per person.

The Daol Public Offering High-Yield Maturity Fund is a mixed bond public fund with a maturity of about 1 year and 2 months. It is a maturity-type fund that does not allow early redemption and will be listed on the exchange after the establishment date. By managing the fund’s maturity and the remaining maturity of bonds similarly, it reduces interest rate risk and aims for high interest income by including high-yield bonds at a level of 70-80%. Compared to general funds that include high-yield bonds at about 45-50%, it can expect relatively higher returns.

High-yield funds offer a 5% priority allocation benefit for public offering stocks, allowing for additional returns. From 2024, the priority allocation volume for KOSDAQ stocks is expected to increase from 5% to 10%, which is anticipated to help improve profitability.

For those subject to comprehensive financial income taxation exceeding 20 million KRW annually, the separate taxation benefit of the Daol Public Offering Maturity High-Yield Fund helps with tax savings. Assuming an investment of 30 million KRW in a high-yield fund and an annual pre-tax return of 5%, there is a maximum tax saving effect of 1.53 million KRW over three years. Additionally, at 6% pre-tax annual return, the tax saving is 1.84 million KRW, and at 7% pre-tax annual return, it is 2.15 million KRW.

Daol Asset Management launched the ‘Daol Public Offering High-Yield Fund’ and ‘Daol Block Deal Public Offering High-Yield Fund’ in 2015 and 2016, respectively, and continues to manage them. The fund net assets are 132.6 billion KRW and 243.8 billion KRW, respectively, making them among the largest in the industry.

The subscription period for the Daol Public Offering High-Yield Maturity Fund is until the 26th of this month. Subscriptions can be made through KB Securities, NH Investment & Securities, SK Securities, Eugene Investment & Securities, Hi Investment & Securities, Korea Investment & Securities, and Hanwha Investment & Securities.

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