Samsung Asset Management's Monthly Dividend 'KODEX US Dividend Premium Active ETF' Approaches 7.8% Monthly Return

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[Asia Economy Reporter Hwang Yoon-joo] Samsung Asset Management announced that the 'Samsung KODEX US Dividend Premium Active ETF' achieved a one-month return of 7.8% since its listing on September 27. The first monthly dividend of this ETF is scheduled to be paid in early November at a pre-tax amount of 50 KRW.

The Samsung KODEX US Dividend Premium Active ETF is a localized product tailored to the domestic investment environment, based on the ‘DIVO ETF (CWP Enhanced Dividend Income ETF)’, a major mega-hit ETF from Amplify, a US asset management company in which Samsung Asset Management acquired a 20% stake this year.

This ETF selects high-quality dividend growth stocks from the US S&P components that have consistently increased dividends over a long period, investing in a diversified range of sectors including IT, finance, healthcare, consumer goods, industrials, and energy. Since its listing in 2016, DIVO has provided an average annual dividend yield of about 5.3%, paying an average monthly distribution of 0.44%. For example, an investment of 100 million KRW per year would have yielded approximately 440,000 KRW per month.

This product is a monthly dividend ETF that utilizes an individual stock covered call strategy. It aims for a ‘two birds with one stone’ return by securing steady cash dividends as well as capital appreciation of the underlying assets. To ensure stable monthly dividend payments, it generates additional dividend resources by employing a call option selling strategy in addition to corporate dividends.

The excellent one-month return performance of the Samsung KODEX US Dividend Premium Active ETF can be attributed to its investment in relatively low-volatility S&P high-quality dividend growth stocks, combined with a flexible covered call strategy tailored to individual companies rather than a simple mechanical covered call approach. The premiums received from selling call options vary by stock, and in some cases, the strategy may forgo option premiums to strategically pursue gains from market appreciation. This active strategy, which pursues both option premiums and capital gains from asset price increases, proved effective.

Im Tae-hyuk, Head of ETF Management at Samsung Asset Management, stated, "We believe that investors are highly satisfied with monthly dividend products because the stable monthly cash inflows can be used for living expenses or additional investments." He added, "The KODEX US Dividend Premium Active ETF is a product that not only provides steady cash dividends but also aims for asset appreciation through flexible management, and it has been rapidly growing with continuous inflows since its launch."

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