Samsung KODEX Hanguk Budongsan REITs Infrastructure Surpasses 200 Billion KRW in Net Assets

Individual investors have been steadily net buying REITs ETFs, considered the main beneficiaries of interest rate cuts, since the beginning of this year. The stable high monthly distribution with limited volatility and the benefits of separate taxation have attracted the attention of real estate-preferred investors who are serious about tax-saving strategies.

Samsung Asset Management announced on the 20th that the net assets of the KODEX Korea Real Estate REITs Infrastructure ETF have surpassed 200 billion KRW. This milestone was reached about a year after its listing in March last year.

The KODEX Korea Real Estate REITs Infrastructure ETF is a monthly distribution product that diversifies investments across domestic infrastructure assets and listed REITs. It tracks the KRX Real Estate REITs Infrastructure Index and invests in 17 REIT products including Macquarie Infrastructure (24.9%), SK REITs (12.4%), and ESR Kendall Square REITs (11.2%).

Six domestic REITs ETFs, including the KODEX Korea Real Estate REITs Infrastructure ETF, formed a peak last August and declined until the end of the year, but have formed a bottom this year and have risen for three consecutive months. The KODEX Korea Real Estate REITs Infrastructure ETF has recorded a 7.38% return since the beginning of the year. Most domestic REITs ETFs saw steady increases in net buying by individual investors anticipating interest rate cuts from early last year, but this trend has plateaued this year. However, unlike other REITs ETFs, the KODEX Korea Real Estate REITs Infrastructure ETF has continued to attract concentrated net buying by individuals amounting to 55.2 billion KRW this year.

The steady inflow of buying by individual investors is attributed to the stable monthly distribution rate reaching 9% annually, the separate taxation applied at 9.9% on dividend income up to 50 million KRW, and the high investment proportion in infrastructure assets favored by individual investors interested in real estate investment.

Since its listing, the KODEX Korea Real Estate REITs Infrastructure ETF has paid a total of 424 KRW in distributions over 12 payments, maintaining the highest monthly distribution rate among domestic REITs ETFs at approximately 8.95% annually. Starting with 30 KRW per share in March last year when the first monthly distribution was made, the dividend has steadily increased to 39 KRW per share this month, earning investor trust.

The product is a publicly offered real estate collective investment vehicle subject to the Special Tax Treatment Control Law, allowing investors to benefit from a separate taxation rate of 9.9% on dividend income up to 50 million KRW. Investors can apply for this benefit through their current securities firms, which provides a significant advantage for those with annual financial income exceeding 20 million KRW by helping them avoid comprehensive financial income taxation.

Another factor attracting individual investors is the ETF’s investment of more than 24.9% in Macquarie Infrastructure, which has demonstrated outstanding performance over a long period among real estate assets.

Ma Seung-hyun, a manager at Samsung Asset Management, said, "Unlike other domestic REITs ETFs, the steady inflow of individual investors’ buying into the KODEX Korea Real Estate REITs Infrastructure ETF this year confirms that investors have a very high interest in the separate taxation benefits as well as the stable high monthly distributions."

He added, "Since real estate REITs can be used alongside equity and bond products to diversify a monthly distribution portfolio, the KODEX Korea Real Estate REITs Infrastructure ETF will be a good option for individual investors planning monthly distribution investments, not only in general accounts but also in pension accounts."

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