Hantoo Asset Management's 3 ACE Covered Call ETFs... "Individual Net Purchase Total Exceeds 250 Billion Won"

Korea Investment Trust Management announced on the 13th that individual investor funds flowing into the three ACE Covered Call Exchange-Traded Funds (ETFs) have surpassed 250 billion KRW.

The three covered call products held by ACE ETFs are △ ACE US 500 Daily Target Covered Call (Synthetic) ETF △ ACE US Semiconductor Daily Target Covered Call (Synthetic) ETF △ ACE US Big Tech 7+ Daily Target Covered Call (Synthetic) ETF. The three products, which were simultaneously listed in April, are monthly dividend products utilizing daily options (0DTE). Korea Investment Trust Management was the first domestic asset management company to introduce covered call ETFs using daily options (0DTE).

According to the Korea Exchange, individual investor funds inflows since the beginning of the year by product are highest for ACE US Big Tech 7+ Daily Target Covered Call (Synthetic) ETF (121 billion KRW), followed by ACE US 500 Daily Target Covered Call (Synthetic) ETF (78.1 billion KRW), and ACE US Semiconductor Daily Target Covered Call (Synthetic) ETF (63.4 billion KRW). The combined net purchase amount by individual investors for the three products over about six months reaches 262.5 billion KRW.

The steady inflow of funds is attributed to the high growth potential of the underlying assets and stable dividend payments. The three ETFs use the top 500 large-cap US stocks, US semiconductor, and representative big tech companies as their underlying assets, respectively, while utilizing Nasdaq 100 ETF (QQQ ETF) and S&P 500 ETF (SPY ETF) call options. As a result, since listing, the returns range from 10.01% to 23.88% (6-month returns range from 0.43% to 14.47%), and the annualized dividend yield reaches 13.45% to 14.88%.

Nam Yong-su, Head of ETF Management at Korea Investment Trust Management, explained, "The three ACE Covered Call ETFs use 0DTE out-of-the-money (OTM) 1% options to partially resolve the upper limit constraint, which was a drawback of covered call products, while also providing stable dividend payments."

He added, "Covered call ETFs can incur losses like other financial investment products if the decline in the underlying index exceeds the option premium, so investors should carefully compare the underlying assets and option strategies before investing."

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