Samsung KODEX 200 Target Weekly Covered Call Surpasses 300 Billion KRW in Net Assets

Samsung Asset Management announced on the 24th that the net assets of ‘KODEX 200 Target Weekly Covered Call,’ the first domestic target covered call ETF, have surpassed 300 billion KRW.

KODEX 200 Target Weekly Covered Call is the first domestic target covered call ETF utilizing the KOSPI 200. It is designed to flexibly adjust the weekly call option selling ratio with a target premium of 15% per year, allowing partial participation in the rise of the KOSPI 200 index.

In addition to the 15% annual premium, it pays an annual dividend of approximately 17% based on the dividend yield of KOSPI 200 stocks, distributed monthly on the 15th. In January and February, dividends of 202 KRW and 142 KRW were paid respectively as of the 15th.

The rapid inflow of funds into KODEX 200 Target Weekly Covered Call is attributed to the high monthly dividend rate of 17% per year and the advantage of partial participation in the rise of the KOSPI 200 index. Unlike high-dividend ETFs based on overseas stocks or bonds, most of the dividend income and any future separate capital gains are exempt from taxation, which is also considered an advantage.

For overseas stock or bond products, a dividend income tax of 15.4% is imposed on capital gains, interest/dividend income, and derivative profits. This was a burden for investors receiving distributions. If annual interest/dividend income exceeds 20 million KRW, comprehensive taxation on financial income is applied. Large investors using general accounts or long-term investors were reluctant to invest in overseas asset-linked monthly high-dividend products.

In the case of domestic stock-type covered call ETFs like KODEX 200 Target Weekly Covered Call, when investing through a general account, investors can receive tax benefits not only on capital gains but also on call option premium income. Only the portion of the dividend corresponding to the portfolio asset dividends is taxed, significantly reducing the tax burden on monthly distributions. Inquiries about the product to fund managers and consultants have greatly increased.

The popularity of KODEX 200 Target Weekly Covered Call is also reflected in KODEX Financial High Dividend TOP10 Target Weekly Covered Call. This ETF participates in the stock price increases of financial stocks that have announced record dividends and share buybacks due to expanded shareholder return policies. It pays a 15% annual dividend based on the month-end. Since its listing, individual net purchases have exceeded 64 billion KRW in just over two months, and its recent net assets have reached 117.8 billion KRW.

Lee Daehwan, a manager at Samsung Asset Management, said, "Unlike overseas stock products, KODEX 200 Target Weekly Covered Call offers excellent tax-saving effects and stable high monthly distributions, leading to continuous increases in inquiries from investors and securities firm PBs." He added, "The relatively undervalued state of domestic stocks and their gradual movement are also advantageous for domestic covered call products. It will be a good investment option for cash-holding retired investors who prefer monthly dividends."

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