KIWOOM US High Dividend & AI Tech ETF to Be Newly Listed on the 23rd

Kiwoom Asset Management announced on September 19 that it will list the "KIWOOM US High Dividend & AI Tech ETF," which combines US high-dividend stocks and AI tech stocks, on the Korea Exchange on September 23.

This is the second next-generation dividend growth ETF launched by Kiwoom Asset Management, following the "KIWOOM Korea High Dividend & US AI Tech" introduced on September 2. The ETF aims to maximize stable dividend yields through concentrated investment in US high-dividend stocks while also pursuing the growth potential of AI tech stocks. It is a monthly dividend ETF that pays distributions at the end of each month.

The KIWOOM US High Dividend & AI Tech ETF invests by combining the US High Dividend TOP20 Index (70%) and the US AI Tech TOP10 Index (30%) at fixed proportions.

The US High Dividend TOP20 Index selects investment stocks from companies with a free-float market capitalization of at least 1 billion dollars, a record of paying dividends for five consecutive years, and profitability for the past two consecutive years. It removes the bottom 25% of stocks based on three-year average return on equity (ROE), operating cash flow to debt ratio, and 12-month momentum, and then composes the index of the top 20 stocks by dividend yield. A dividend yield-weighted method is applied to provide a stable cash flow.

The US AI Tech TOP10 Index targets stocks with a market capitalization of at least 10 billion dollars and an average daily trading value of at least 1 million dollars over the past three months. It uses natural language and keyword analysis to select tech stocks with high relevance to AI. The index then focuses investment on the top 10 stocks with the highest growth potential.

The strategy of combining the two indices involves monthly rebalancing at a fixed 7:3 ratio, using gains from AI tech stocks to purchase additional high-dividend stocks. This increases the number of high-dividend stocks held, leading to structural dividend growth through larger dividend payouts. Conversely, if AI tech stocks decline, high-dividend stocks are sold to buy AI tech stocks at lower prices. This is a new form of dividend growth strategy that overcomes the limitations of traditional dividend growth ETFs, which relied on corporate performance or dividend policies. By concentrating on a small number of high-dividend stocks, investors can expect a dividend yield of about 3.7% with just a 70% allocation to dividend stocks. The ETF is designed to meet investor expectations for dividend growth stock investments.

This ETF is an advanced version of the "SCHD 80% + QQQ 20% strategy," which is widely used among US dividend ETF investors. While the traditional SCHD 80% QQQ 20% approach diversified at the ETF level, the KIWOOM US High Dividend & AI Tech ETF is more precisely designed at the individual stock level.

Instead of diversifying across 100 stocks through SCHD, this ETF maximizes high-dividend appeal by focusing on the top 20 stocks by dividend yield, and enhances growth potential by concentrating on 10 leading AI tech stocks rather than diversifying across the entire tech sector. Additionally, the monthly automatic rebalancing at a fixed 7:3 ratio offers convenience in portfolio management.

A representative from Kiwoom Asset Management stated, "The KIWOOM US High Dividend & AI Tech ETF achieves diversification by investing in a select number of US high-dividend and tech stocks at a 7:3 ratio," adding, "It is an efficient product that simultaneously pursues both dividends and growth."

The representative further commented, "The strengthened dividend growth rate achieved through structural dividend growth can serve as a meaningful solution to the issue of reduced dividends due to foreign withholding taxes."

원본보기 아이콘

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.