Hanwha Asset Management Raises PLUS Share Buyback & High Dividend ETF Distribution to KRW 70

Hanwha Asset Management announced on April 15 that it will change the distribution policy of the 'PLUS Share Buyback & High Dividend' Exchange Traded Fund (ETF) to focus on Total Shareholder Return (TSR), increasing the monthly distribution from the previous KRW 40 to KRW 70.

As of the day before the ex-dividend date (April 13), the monthly distribution rate stands at 0.54%, which is equivalent to an annualized rate of 6.50%.

The PLUS Share Buyback & High Dividend ETF invests in the top 30 stocks based on the combined TSR, calculated by adding the expected dividend yield and share buyback rate. A representative from Hanwha Asset Management explained, “Previously, distributions were made only from the dividends of the constituent stocks. However, following the enforcement of the third amendment to the Commercial Act on March 6, which made share cancellation mandatory after buybacks, we are now fully implementing the TSR-based distribution policy that was our original goal at the time of product design.”

When a company buys back and cancels its own shares, the number of shares outstanding decreases, resulting in an increase in Earnings Per Share (EPS). The PLUS Share Buyback & High Dividend ETF has decided to distribute not only dividend income but also capital gains from the rise in corporate value due to share cancellations as part of the distributions.

Notably, companies that have bought back more than 3% of their market capitalization in treasury shares can be added to the portfolio as special constituents at any time, allowing proactive inclusion of shareholder-friendly companies. According to the third amendment to the Commercial Act, companies that newly acquire treasury shares are required to cancel them within a maximum of one year. In addition, since capital gains from share cancellations are classified as capital gains, no dividend income tax (15.4%) is imposed when receiving distributions.

This ETF’s recent cumulative performance is 19.61% over three months and 35.30% over six months.

Kim Jeongseop, Head of the ETF Business Division at Hanwha Asset Management, stated, “With share cancellations now mandated by the amendment to the Commercial Act, we can realize the distribution structure we originally aimed for during design. We will provide differentiated monthly cash flows in line with the shift from an era focused solely on dividends to one that considers total shareholder return.”

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