Shinhan Asset Management to List New 'SOL 200 Target Weekly Covered Call' ETF

Tax-Exempt Advantage for Domestic Option Premiums
Enhanced Convenience with Early-Month Distribution Structure

Shinhan Asset Management announced on March 17 that it will newly list the 'SOL 200 Target Weekly Covered Call' ETF, which seeks monthly distributions by utilizing the KOSPI200 index as its underlying asset and generating income from both option premiums and dividends.

According to Shinhan Asset Management on March 16, the SOL 200 Target Weekly Covered Call ETF is a target covered call strategy ETF that invests in the KOSPI200 and simultaneously sells domestic weekly call options, aiming for an annual option premium income of around 15%. In addition, when dividend income from the KOSPI200 constituent stocks is included, it can secure additional resources for distribution.

Notably, while this product is based on the same structure as existing domestic target covered call strategy products, it enhances convenience for investors who require regular cash flow by adopting a structure in which distributions are paid at the beginning of each month.

The target covered call strategy seeks a target premium by utilizing only a portion of the assets, as opposed to a typical covered call, allowing for flexible adjustment of the option selling ratio. This enables higher market participation when the underlying asset rises. As a result, investors who desire monthly distributions can pursue stable premium income while also reducing the likelihood of being left behind in a rising market, which is a significant advantage.

There is also considerable appeal from a tax-saving perspective. Domestic option premium income is exempt from taxation under current tax law and is not included in the comprehensive taxation of financial income. When investing through a regular account, investors can pursue a steady monthly cash flow with a lower tax burden compared to overseas covered call products. However, dividend income generated from investments in KOSPI200 constituent stocks is subject to dividend income tax.

Kim Junghyun, Head of ETF Business Group at Shinhan Asset Management, stated, "Recently, investors are choosing domestic equity-based monthly dividend ETFs not only for high distribution yields but also for participation in market gains, stable cash flows, and tax efficiency," adding, "SOL 200 Target Weekly Covered Call will be a useful choice for investors who prefer early-month distributions, wish to reduce their tax burden and create steady cash flow through regular accounts, and seek a certain level of market participation even in rising markets."

Meanwhile, the first monthly dividend for the SOL 200 Target Weekly Covered Call ETF is scheduled to be paid on May 4, and the deposit time for distributions may vary depending on each securities firm's policy.

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