KB Asset Management, KBSTAR 200 Weekly Covered Call ETF... "First Monthly Dividend Payment"

KB Asset Management announced on the 3rd that it paid a dividend of 105 KRW per share to investors who purchased the ‘KBSTAR 200 Weekly Covered Call ETF’ by the 27th of last month. The dividend yield was approximately 1.01%, meaning that an investment of 100 million KRW in the product would have yielded about 1 million KRW in dividends in just one month.

The closing price on the ex-dividend date, March 28, was 10,305 KRW, but the stock price steadily rose and closed at 10,415 KRW as of the 2nd of this month. Since its listing, the cumulative return including dividends has exceeded 5%.

The ‘KBSTAR 200 Weekly Covered Call ETF,’ which was listed last month, is the first ETF using a domestic index to apply a ‘weekly covered call’ strategy by selling call options with maturities of less than one week.

The underlying index is the ‘KOSPI 200 Weekly Covered Call ATM Index,’ jointly developed by KB Asset Management and the Korea Exchange. The ETF has been granted priority usage rights by the exchange, holding exclusive rights to use the index for six months from the listing date.

Since the ‘KOSPI 200 Weekly Covered Call ATM Index’ was calculated in 2019, the average monthly option premium has been around 3%. Notably, it has never fallen below 1% since the index’s inception.

This product is also advantageous in terms of tax savings compared to other covered call ETFs based on overseas assets or investment assets such as time deposits, bonds, and equity-linked securities (ELS).

Dividend income generated from the KOSPI 200 stocks invested in by the ETF (around 0.16% monthly) is taxable, but most of the dividend source, which consists of capital gains from stock trading and income from selling options?derivative products traded on the exchange?is excluded from the taxable base price calculation.

Additionally, investors can allocate up to 100% of their investments in Individual Savings Accounts (ISA) and personal pension accounts, and up to 70% in retirement pension accounts.

Kim Chan-young, Head of the ETF Business Division at KB Asset Management, said, “The first dividend payment of the ‘KBSTAR 200 Weekly Covered Call ETF’ was made stably,” adding, “Since a significant portion of the dividend source is the non-taxable option premium, it will be an even more attractive investment destination for investors seeking tax benefits.”

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