Samsung Asset Management Lists KODEX Financial High Dividend TOP10 Target Weekly Covered Call

Samsung Asset Management announced on the 17th that it will newly list the monthly dividend product, ‘KODEX Financial High Dividend TOP10 Target Weekly Covered Call Exchange-Traded Fund (ETF).’

The KODEX Financial High Dividend TOP10 Target Weekly Covered Call ETF selects financial stocks expected to continue rising in price due to active shareholder return policies and continuous expansion of dividend payout ratios. In particular, it incorporates 10 stocks by comprehensively considering low price-to-book ratio (PBR), high dividend yield, top ROE, and dividend continuity. The Financial High Dividend TOP10 includes KB Financial Group, Shinhan Financial Group, Hana Financial Group, Woori Financial Group, IBK Industrial Bank, Samsung Fire & Marine Insurance, DB Insurance, NH Investment & Securities, Samsung Securities, and Korea Financial Group.

This product aims for an annual 15% (1.25% monthly) dividend by combining high dividend income and option premiums. Since the recent four-year average dividend yield of the Financial High Dividend TOP10 exceeds 5%, even with a fixed 30% option ratio, most of the target distribution rate can be met, increasing the participation rate in price appreciation compared to general covered call products.

Additionally, the KODEX Financial High Dividend TOP10 Target Weekly Covered Call can receive tax-exempt benefits because it earns option premium income using domestic derivatives. In the case of overseas investment-type domestic covered call products, both dividend income and capital gains are taxable, so investing through a general account and earning 20 million KRW in profits would be subject to comprehensive taxation, which this product significantly alleviates.

This product sells KOSPI 200 weekly options on a weekly basis to pursue premium income of about 10% annually. Since income generated from domestic derivatives and capital gains from domestic stocks are not taxed under tax law, dividends can actually be received at a low tax rate. Pure capital gains are also subject to tax exemption. Monthly dividends are paid based on the last business day of each month.

Demand from individual investors for target premiums investing in domestic assets has already been confirmed. For example, Samsung Asset Management’s similar structured KODEX 200 Weekly Target Covered Call, the first of its kind listed domestically on the 3rd of this month, attracted high interest as individual investors concentrated nearly 20 billion KRW in net purchases within just 10 trading days after listing. This product also aims for an annual 15% premium using KOSPI 200 weekly options, combined with about 2% annual KOSPI 200 dividend yield, targeting around 17% annual monthly dividend payments. Individual investors, understanding that option premiums and capital gains excluding dividend income from KOSPI 200 are all tax-exempt, seem to have actively invested to earn monthly dividend income while bearing low taxes in general accounts.

Meanwhile, Samsung Asset Management designed the KODEX Financial High Dividend TOP10 Target Weekly Covered Call as a month-end dividend product for individual investors who want to create cash flow by receiving biweekly dividends. The earlier KODEX 200 Target Weekly Covered Call was launched as a mid-month dividend product based on the 15th. By using both products for diversified investment, investors can create cash flow twice a month on a biweekly basis.

Lee Daehwan, manager at Samsung Asset Management, said, "With the listing of the KODEX Financial High Dividend TOP10 Target Weekly Covered Call, investor interest in domestic target covered call ETFs, which offer predictable distribution levels, participation in stock price appreciation, and low tax burdens, is expected to grow further." He added, "We expect this product to attract significant attention as it can provide stable cash flow to retirement investors through option premium tax exemption benefits in general accounts."

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