'SOL US 30-Year Treasury Covered Call ETF' Net Assets Surpass 100 Billion Won
Shinhan Asset Management's 'SOL US 30-Year Treasury Covered Call ETF,' which was listed at the end of last year, surpassed 100 billion KRW in net assets within three months. The net purchase volume through general accounts reached 55 billion KRW. It is estimated that about 50 billion KRW was also purchased through pension accounts.
Oh Hyung-seok, manager of the ETF management team at Shinhan Asset Management, explained, "The SOL US 30-Year Treasury Covered Call ETF pays investors a monthly distribution of over 1% through bond interest and option selling premiums," adding, "Since the timing for the start of interest rate cuts is not clearly defined, interest rate volatility is expected to continue for the time being."
As the US Federal Reserve approaches rapid interest rate cuts cautiously, the yields of ETFs based on US long-term bonds have shown significant differences due to sharp interest rate fluctuations since the beginning of the year. While the yield gap among major US long-term bond ETFs has widened by more than 10 percentage points, only the SOL
US 30-Year Treasury Covered Call ETF has recorded positive returns.
Since the beginning of the year, the SOL US 30-Year Treasury Covered Call ETF has posted a return of 3.77%, whereas US long-term bond ETFs have struggled with returns ranging from approximately -6% to -14%. The SOL US 30-Year Treasury Covered Call ETF also offers additional income through monthly dividend payments.
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The SOL US 30-Year Treasury Covered Call ETF invests in US long-term bonds using a covered call strategy. The covered call strategy involves purchasing the underlying asset, US long-term bonds, while simultaneously selling call options (the right to buy at a predetermined strike price before the expiration date in options trading) on the same asset. This strategy is most effective when the underlying asset moves within a range-bound market without a clear directional trend.
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