Korea Investment Management ACE U.S. Semiconductor Daily Target Covered Call ETF Ranks No. 1 in Returns Among Peers

Korea Investment Management announced on the 10th that the ACE U.S. Semiconductor Daily Target Covered Call (Synthetic) Exchange Traded Fund (ETF) has recorded the highest returns over the past 1, 3, and 6 months, as well as over 1 year, among overseas equity-type covered call ETFs listed in Korea.

According to fund evaluator FnGuide, as of the 9th, the recent returns of the ACE U.S. Semiconductor Daily Target Covered Call (Synthetic) ETF were 9.69% over 1 month, 18.17% over 3 months, 54.83% over 6 months, and 60.04% over 1 year. These are the highest figures among 16 overseas equity-type covered call ETFs classified by FnGuide. Over the same periods, they significantly outperformed the average returns of ETFs in the same category, which were -1.12% over 1 month, 0.73% over 3 months, 16.02% over 6 months, and 20.44% over 1 year.

As of the 9th, the net asset value stood at 107.1 billion won, with strong inflows of capital over the past month, mainly from individual investors.

The ACE U.S. Semiconductor Daily Target Covered Call (Synthetic) ETF invests in the top 30 U.S. semiconductor companies by market capitalization, a core theme of the artificial intelligence (AI) era. It is the first in Korea to introduce zero-day-to-expiry (0DTE) options that mature within 24 hours, and it sells options on a Nasdaq 100 ETF every day to generate distribution resources.

It also employs a strategy of selling 1% out-of-the-money (OTM) call options, allowing investors to capture stock price gains in line with index increases until the Nasdaq 100 index rises by 1% in a single day. Conversely, if the index’s daily gain does not exceed 1%, the structure enables investors to capture both the stock price appreciation on the underlying holdings and the option premium from selling calls.

Over the past year, the total distribution per unit amounted to 1,398 won, with an average annual distribution yield of 13.69%. This is slightly below the maximum target average annual distribution yield of 15%, which can be interpreted as a discrepancy arising from an increase in net asset value (NAV) driven by recent share price gains in the semiconductor sector. In practice, Korea Investment Management has been maintaining a monthly distribution yield of around 1.25%, based on the latest NAV at each monthly distribution point.

Nam Yongsoo, Head of ETF Management at Korea Investment Management, said, "In consideration of the structural characteristics of covered call products, which partially cap upside gains, we carefully selected underlying assets such as U.S. semiconductors that have strong potential for long-term upward trends," adding, "However, if the decline in the underlying index becomes sharply larger, there may be a deviation from market returns and a risk of principal loss, so investors should carefully compare the underlying growth potential with the option strategy before investing."

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