Shinhan Asset Management "SOL US Dividend Dow Jones Net Assets Surpass 500 Billion Won"

Shinhan Asset Management announced on the 10th that the net assets of the monthly dividend ETF SOL U.S. Dividend Dow Jones have surpassed 500 billion KRW. This is the combined net assets of SOL U.S. Dividend Dow Jones (388.5 billion KRW) and SOL U.S. Dividend Dow Jones (H) (121.4 billion KRW).

‘SOL U.S. Dividend Dow Jones,’ which adds a monthly dividend strategy to SCHD, a representative U.S. dividend growth ETF, has grown to become the largest domestic equity monthly dividend ETF in terms of total net assets. ‘SOL U.S. Dividend Dow Jones (H),’ Korea’s first currency-hedged dividend ETF, quickly expanded its scale after listing, surpassing 100 billion KRW in just 8 months. As of December 28 last year, individual investors’ net purchases of the two ETFs amounted to 240.5 billion KRW for SOL U.S. Dividend Dow Jones, the highest among monthly dividend ETFs, and 74 billion KRW for SOL U.S. Dividend Dow Jones (H), the highest among currency-hedged equity ETFs.

Not only in scale but also in management, it lived up to the nickname “Korean version of SCHD.” As of the end of December, the Q4 and annual dividend yields of SOL U.S. Dividend Dow Jones were 1.02% and 3.64%, respectively, identical to those of SCHD (Schwab U.S Dividend Equity ETF). On a monthly basis, it paid an average dividend of 28.4 KRW with a dividend yield of 3.04%. Therefore, when investing in SOL U.S. Dividend Dow Jones through a pension account with tax deferral benefits, investors could enjoy the full dividend yield compared to SCHD, whose dividend yield decreases after withholding dividend income tax.

Park Soo-min, Head of ETF Product Strategy Team at Shinhan Asset Management, said, “Last year, the sectors leading the rise in the U.S. stock market were IT, Communication Services, and Consumer Discretionary. SOL U.S. Dividend Dow Jones, which had relatively low portfolio weights in these sectors, underperformed the S&P 500 unusually in terms of performance.” He added, “Since November, as expectations for interest rate cuts increased, a broad-based rise across sectors improved performance. Given that SOL U.S. Dividend Dow Jones invests diversely across all sectors, the more the concentration in rising sectors is alleviated, the more likely its performance will improve.”

Last year, the U.S. stock market rose close to historic highs, with IT, Communication Services, and Consumer Discretionary sectors leading gains of over 40% compared to the beginning of the year. However, sectors like Consumer Staples and Utilities underperformed relatively, and only 29% of stocks exceeded the S&P 500’s rise, indicating a strong concentration in specific stocks and sectors.

Park said, “The 5-year average dividend growth rate based on the underlying index is 13.2%, and the dividend yield for 2024 is expected to be 3.8%.” He forecasted, “The most important keyword for the stock market in 2024 is ‘interest rate cuts.’ Following the last FOMC’s end of tightening policy and the announcement of at least three rate cuts, the attractiveness of dividend income compared to interest income will increase, enhancing the investment appeal of SOL U.S. Dividend Dow Jones.”

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