Dividend Plus Semiconductor Investment... 'KODEX Semiconductor Target Weekly Covered Call' ETF Listed

100% Allocation to Semiconductors Including Samsung Electronics and SK hynix
30% Sale of KOSPI200 Options
9% Annual Distribution Target, With Excess Premium Reinvested

The 'KODEX Semiconductor Target Weekly Covered Call' ETF, which invests in leading domestic semiconductor stocks and provides monthly dividends at the end of each month, will be newly listed on May 12.

On May 11, Samsung Asset Management held an online press conference to introduce KODEX’s unique covered call solution, built upon the robust fundamentals of Korean semiconductor companies. The strategy actively participates in the semiconductor industry rally while securing stable monthly distributions by utilizing the highly liquid KOSPI200 weekly options.

The most notable feature of this ETF is that it invests 100% in the semiconductor stocks that constitute the TR index of Korea's representative semiconductor index, the 'KRX Semiconductor' index. Among these, more than 50% of assets are concentrated in Samsung Electronics and SK hynix—specifically, as of May 7, around 31.4% in SK hynix and approximately 21.4% in Samsung Electronics.

To increase the allocation to Samsung Electronics and SK hynix, a 'passive' strategy was adopted. Park Seongcheol, Team Leader of ETF Management Team 1 at Samsung Asset Management, explained, "By law, active ETFs are limited to a 10% cap per individual stock, but as an exception, they can be allocated up to the previous month's KOSPI market weighting. In contrast, passive ETFs can include up to 30% for Samsung Electronics and 30% for SK hynix, with a maximum combined weighting of 60%. Considering a semiconductor covered call strategy led by the top two stocks, the passive approach, which allows for a generous allocation to these leading stocks, is superior."

Furthermore, the KODEX Semiconductor Target Weekly Covered Call ETF implements a strategy of selling KOSPI200 weekly call options—known for their highest liquidity in Korea—at a fixed 30% rate to provide a target monthly distribution. Park noted, "For monthly dividends to be paid normally, abundant liquidity in the options market is a prerequisite. In March this year, the cumulative option trading volumes for Samsung Electronics and SK hynix were KRW 50 billion and KRW 90 billion, respectively, while that for KOSPI200 options was about KRW 8.59 trillion. This ensures that, regardless of ETF size, the desired level of premium can be steadily secured."

The premium gained through fixed call option selling is used to distribute a stable target monthly dividend at an annual rate of roughly 9%. Any premium income exceeding this is automatically reinvested into semiconductor stocks, aiming to maximize the compounding effect.

Park added, "Korea’s semiconductors are the solution to bottlenecks occurring across the AI industry. Through a passive structure, we can fully capture the two leading stocks that symbolize Korea’s semiconductor industry and other key market constituents at low cost. By using the overwhelmingly liquid KOSPI200 options instead of individual stock options, we implement a strategy to secure a stable monthly dividend source."

Samsung Asset Management also introduced that, since KODEX Semiconductor Target Weekly Covered Call pays dividends at the end of each month, investors who combine it with products like 'KODEX 200 Target Weekly Covered Call,' which pay dividends mid-month, can create a cash flow twice a month and thereby maximize tax-exempt benefits.

Lim Tae-hyuk, Head of ETF Management Division at Samsung Asset Management (Managing Director), said, "The KODEX Semiconductor Target Weekly Covered Call ETF was launched by combining the needs of semiconductor investors seeking more stability and covered call investors looking to add semiconductor exposure. This ETF is noteworthy for investors who have not yet invested in semiconductors, those wishing to add stability to their existing semiconductor investments, and for mid-month dividend investors who want to receive dividends twice a month while increasing their semiconductor exposure."

Meanwhile, at 6:00 PM on the same day, a KODEX Semiconductor Target Weekly Covered Call webinar for general investors will also be held through the official KODEX YouTube channel.

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