Shinhan Asset Management, First Monthly Dividend Payment for ‘SOL US 30-Year Treasury Covered Call ETF’

Shinhan Asset Management announced on the 1st that it will pay the first monthly dividend for the ‘SOL US 30-Year Treasury Covered Call (Synthetic) ETF.’

According to Shinhan Asset Management, investors who purchased and held the SOL US 30-Year Treasury Covered Call ETF until January 29, the day before the ex-dividend date, will receive a dividend of 102 KRW per share on this day. The timing of the dividend deposit may vary depending on the policies of each securities firm.

Kim Jeong-hyun, Head of the ETF Business Division at Shinhan Asset Management, said, “The SOL US 30-Year Treasury Covered Call ETF is a monthly dividend ETF focused on dividends, and its scale is rapidly increasing due to high interest from individual investors, especially retirement pension investors. The first dividend to be paid is 102 KRW, recording a monthly dividend yield of over 1% as expected, and we anticipate an annual dividend yield of over 10%.”

Since its listing at the end of December last year, the SOL US 30-Year Treasury Covered Call ETF has seen continuous net purchases by individual investors every day. Notably, inflows through retirement pension accounts have been larger than those through general accounts. During this period, individual investors purchased about 20 billion KRW through retirement pension accounts and about 14 billion KRW through general accounts. Supported by this buying momentum, the SOL US 30-Year Treasury Covered Call ETF, which was listed with 8 billion KRW, grew to a scale of 34 billion KRW within one month of listing.

The ‘SOL US 30-Year Treasury Covered Call ETF’ invests in long-term US bonds using a covered call strategy, allowing investors to receive stable monthly dividends. It is managed similarly to the ‘iShares 20+ Year Treasury Bond Buywrite Strategy ETF,’ well known to domestic investors as TLTW.

As a monthly dividend ETF focused on dividends, it is suitable for monthly dividend investors who want to generate stable cash flow every month. In particular, it is classified as a safe asset that can be invested up to 100% of the accumulated funds in retirement pension accounts (DC/IRP), which offer tax benefits and tax deferral, making it highly synergistic with pension accounts.

Meanwhile, the ‘covered call strategy’ is a strategy that involves buying the underlying asset and simultaneously selling call options on that asset. Using the covered call strategy, losses are buffered by the option premium when the underlying asset declines, while gains are capped at a certain level when the underlying asset rises.

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