Shinhan Asset Management to Simultaneously List Two ETFs Benefiting from New Government Policies

Shinhan Asset Management announced on September 18 that it will list the 'SOL Korea High Dividend' and 'SOL Korea AI Software' ETFs simultaneously on the Korea Exchange on September 23.

These two products have been designed to reflect the themes of 'Realizing the Korea Premium' (strengthening trust in the capital market and shareholder returns) and 'Fostering the AI Industry and Ecosystem,' which are among the 12 core strategic tasks in the government's five-year national policy plan.

The SOL Korea High Dividend ETF selects 20 companies with high expected dividend yields among those with strong dividend growth and sound financial structures, in line with changes in the domestic dividend investment environment. The portfolio is then expanded to a total of 30 stocks by adding companies that have implemented reduced dividends and those with outstanding returns from share buybacks.

The ETF strategy incorporates the government's policies to promote dividend investment, such as applying separate taxation for high-dividend companies and maintaining tax exemption benefits for reduced dividends for general shareholders. The ongoing discussion about making share buybacks mandatory through amendments to the Commercial Act has also been reflected in the strategy.

One of the key differentiators from standard high-dividend ETFs is that companies implementing reduced dividends are a major criterion for selection. In the case of reduced dividends, the tax exemption leads to a higher effective ETF distribution, which is a significant advantage.

The top holdings in the portfolio include Woori Financial Group, Hana Financial Group, Kia, Hyundai Motor Company, and Shinhan Financial Group. Companies eligible for separate taxation on dividend income account for 76% of the total portfolio, while companies implementing reduced dividends, such as Korea Financial Group and Hyundai Elevator, make up about 22%.

As of the end of August, the expected annual dividend yield is 6.68%, offering both stability and attractive cash flow potential.

Kim Junghyun, Head of ETF Business at Shinhan Asset Management, stated, "Policy changes such as amendments to the Commercial Act, separate taxation on dividend income, and reduced dividends are enhancing the appeal of domestic dividend investing." He added, "The SOL Korea High Dividend ETF reflects the latest dividend trends, aiming to maximize investors' effective dividend yields while focusing on the quality and sustainability of dividends."

The SOL Korea AI Software ETF is the first ETF that enables focused investment in domestic AI software companies. In line with the government's reaffirmation of its 'Leap to Become a Top 3 AI Power' as one of the 12 core strategic tasks-pursuing sovereign AI development, expanding AI use in both public and private sectors, and injecting an additional 25 trillion won in funding-the ETF includes 15 key companies expected to grow in this environment.

Major components include Kakao and Naver, which together make up about 50% of the portfolio, as well as Samsung SDS, Kakao Pay, LG CNS, Douzone Bizon, Selvas AI, Konan Technology, Cafe24, and Polaris Office.

Kim explained, "Just as the Gyeongbu Expressway in the 1970s laid the foundation for national economic growth, the current government is focused on building an 'AI expressway' to establish an AI foundation and advance Korea in the global AI sovereignty race."

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