"For MZ and Retirees, Growth and Dividends Included"… Hanwha Asset Management Launches Two 'US Growth' ETFs

Hanwha Asset Management announced on the 22nd that it will list two exchange-traded funds (ETFs) focused on U.S. growth stocks, ‘PLUS US S&P500 Growth Stocks’ and ‘PLUS US Dividend Growth Stocks Daily Covered Call,’ on the Korea Exchange.

On the same day, Hanwha Asset Management held a press conference at the Korea Financial Investment Association under the theme, “The Secret to Successful Pension Investment: Finding the Answer in U.S. Growth Stocks,” to introduce the ETFs.

Geum Jeongseop, Head of ETF Business Division at Hanwha Asset Management. Photo by Yoo Hyunseok

Geum Jeong-seop, Head of the ETF Business Division at Hanwha Asset Management, served as the presenter. He suggested a pension investment strategy using the two newly listed ETFs: during the accumulation phase, use the ‘PLUS US S&P500 Growth Stocks’ ETF, and during the payout phase, use the ‘PLUS US Dividend Growth Stocks Daily Covered Call’ ETF.

The ‘PLUS US S&P500 Growth Stocks’ ETF constructs a portfolio by weighting companies with high growth potential within the S&P500 index. It increases the proportion of high-growth sectors such as IT to pursue higher returns compared to the S&P500.

Backtesting results show that this ETF has consistently outperformed the S&P500 over the past 20 years. When investing KRW 500,000 monthly on a dollar-cost averaging basis over the last 20 years, the investment asset amounted to approximately KRW 630 million. This is about KRW 150 million more than investing in the S&P500 using the same method (KRW 480 million).

At the same time, because it diversifies investments across various sectors such as healthcare, finance, and consumer goods, it has lower volatility compared to ETFs composed mainly of technology stocks like big tech. Hanwha Asset Management explains that this product is suitable for pension asset investments where stability is essential.

Head Geum said, "Not only the MZ generation but also retirees are enthusiastic about the S&P500," adding, "However, in terms of performance, it is somewhat disappointing compared to the Nasdaq."

He continued, "To compensate for that shortfall, we enhanced growth with the PLUS US S&P500 Growth Stocks," and added, "This product will be an excellent choice for those planning to retire in 20 years."

The ‘PLUS US Dividend Growth Stocks Daily Covered Call’ ETF invests in U.S. growth stocks that pay high dividends and have increased dividends for five consecutive years. It is a monthly dividend covered call ETF that generates distribution funds by selling S&P500 call options daily.

This ETF consists of companies with steadily increasing dividends among those included in the Bloomberg US 1000 Growth Index. Unlike SCHD, which is the most well-known dividend growth ETF in Korea and is composed mainly of value stocks, the ‘PLUS US Dividend Growth Stocks Daily Covered Call’ portfolio is centered on growth stocks.

Also, unlike the typical 100% covered call strategy that limits stock price appreciation, this ETF lowers the call option selling ratio to 15%, allowing 85% participation in stock price movements, enabling growth stocks to benefit from price increases in rising markets. By minimizing the typical upside limitation effect of covered call strategies, it is expected to outperform SCHD in terms of returns.

The ‘PLUS US Dividend Growth Stocks Daily Covered Call’ ETF pays dividends on the 15th of every month. When invested together with the ‘PLUS High Dividend Stocks’ and ‘PLUS High Dividend Stocks Weekly Covered Call’ ETFs, which pay dividends at the end of each month, investors can complete an income strategy that receives dividends twice a month.

Head Geum explained, "In the pension payout phase, it is important to preserve the principal as retirees are either retired or close to retirement," adding, "In addition, it is necessary to choose products that can provide substantial dividends." He emphasized, "The PLUS US Dividend Growth Stocks Daily Covered Call invests in high-dividend growth stocks and is currently the most advanced product among dividend-related covered call ETFs."

Hanwha Asset Management plans to continue creating products for both the generation accumulating pensions and the generation receiving pensions. He said, "For pension investors who need to pursue returns from a long-term perspective, strategies using U.S. growth stocks that have sustained growth over a long period are very effective," adding, "The two newly listed ETFs are suitable products for pension accumulation and payout phase investors, respectively, based on this growth potential." He further stated, "We plan to continue providing solutions separately for customers building pensions and those receiving pensions in the future."

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