Samsung Asset Management switches 'KODEX Bank ETF' to monthly dividends

Samsung Asset Management announced on the 26th that it will change the distribution (dividend) method of ‘KODEX Bank,’ the first sector ETF listed in Korea in June 2006, from annual dividends to monthly dividends.

The KODEX Bank ETF is a passive product that tracks the KRX Bank Index, which consists of companies representing the domestic banking industry. The investment portfolio includes KB Financial Group (24.2%), Shinhan Financial Group (22.3%), Hana Financial Group (20.2%), and Woori Financial Group (12.6%).

The switch to monthly dividends for KODEX Bank timely reflects recent market changes. Since last year, Hana Financial Group and Woori Financial Group have introduced quarterly dividends, so all four major domestic financial holding companies, including KB Financial Group and Shinhan Financial Group, now pay interim dividends.

Previously, dividends were accumulated and paid once a year, but now the method has changed to paying dividends monthly, providing investors with a stable cash flow. The average dividend yield of KODEX Bank over the past three years is 5.3% per annum, which is 3.6 percentage points higher than the domestic KOSPI dividend yield of 1.7%.

KODEX Bank has net assets of 402.8 billion KRW, and the transition to monthly dividends is expected to add momentum to the monthly dividend products that have been popular since last year. Moreover, driven by the strong performance of securities firms and banks, financial stocks have been on the rise, achieving a 1-month return of 5.46%, a 3-month return of 11.09%, and a 6-month return of 29.95%, outperforming the KOSPI index’s 1-month increase of -2.3% by approximately 7.75 percentage points during the same period.

Recently, demand for stable monthly cash flow investments has been increasing not only among middle-aged and older investors but also among younger generations. After the monthly dividend transition of KODEX High Dividend in March this year, KODEX Bank is the second KODEX ETF to switch to monthly dividends this year. As a result, the Samsung Asset Management KODEX monthly dividend ETF series has expanded to 14 types.

Investors can receive monthly dividends if they purchase the ETF at least three business days before the end of each month. For this month, purchasing by July 29th will qualify for the monthly dividend. The effective date of the monthly dividend transition for KODEX Bank is August 2nd.

Lee Daehwan, a manager at Samsung Asset Management, said, “With the transition of KODEX Bank to monthly dividends, it is expected to be an important chip for investors’ monthly dividend investments,” adding, “Since an annual dividend yield of over 5% can be expected, investors seeking stable cash flow should take an interest.”

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