KODEX US Dividend Covered Call Active Surpasses 1 Trillion Won in Net Assets

The US dividend stock covered call ETF, which invests in dividend growth stocks and offers both strong returns and a high monthly distribution rate, has joined the "1 trillion won club" thanks to a surge in net purchases by individual investors over the past year.

Samsung Asset Management announced on the 16th that the net asset value of the "KODEX US Dividend Covered Call Active" ETF has reached 1.0195 trillion won.

Listed in September 2022, KODEX US Dividend Covered Call Active is a domestically listed product that replicates the "DIVO" ETF, which is recognized in the US for its flexible covered call strategy delivering high returns and stable distributions. It holds the VOO ETF (33.5%), which tracks the US S&P 500 Index, and the DIVO ETF (14.3%). In terms of individual stocks, it is diversified across various sectors, including Caterpillar (3.1%), Goldman Sachs (3.0%), and Apple (2.1%).

KODEX US Dividend Covered Call Active grew by over 887.1 billion won in net assets in about a year, rising from 132.4 billion won at the end of last year-an increase of more than 670%. With stable returns and an excellent monthly dividend rate, net purchases by individual investors have also been rapidly increasing. This year, the net inflow from individual investors reached 660.6 billion won, making it the largest among US dividend stock covered call ETFs listed in Korea.

The reason KODEX US Dividend Covered Call Active has attracted the attention of individual investors is its high returns. The ETF’s performance was ▲10.8% over 3 months, ▲19.4% over 6 months, ▲15.7% year-to-date, and ▲16.5% over one year-the highest among US dividend ETFs listed domestically.

The main reason it was the top choice for individual investors this year is that its maximum drawdown (MDD) over the past year was only -12.59%. Over the same period, the KODEX US S&P 500 ETF recorded about -17.12%. The fact that it declined less than market benchmark products and offered stable dividend stock investment made it a popular choice among individual investors.

US dividend stock products have shown sluggish price increases since 2023. For example, the SCHD ETF, well known among Korean investors, saw Broadcom-one of its holdings-emerge as a leading AI stock, resulting in a significant price surge. However, as this led to a lower dividend yield, Broadcom was removed from the ETF in March 2024, negatively affecting returns.

In contrast, KODEX US Dividend Covered Call Active distinguished itself from other dividend stock products by including technology stocks with growing dividends, thereby benefiting from the AI boom and achieving the highest performance among dividend stocks. Notable examples include Microsoft and Apple, which, despite being technology stocks, were included for their growing dividends in response to rapidly changing market conditions.

Furthermore, the monthly distribution rate has steadily increased from 0.47% at the time of listing to 0.76% per month. The ETF currently boasts an annual dividend yield of 8.8%, living up to its reputation as a dividend growth ETF. The distribution record date is the 15th of every month, making it a mid-month dividend product.

Samsung Asset Management manager Ma Seunghyun explained, "Smart domestic investors believe that simply focusing on dividend yield is not enough for active asset growth through dividend stock investment."

He added, "Investors are showing interest in KODEX US Dividend Covered Call Active, known as the 'Korean version of DIVO,' which has demonstrated differentiated stock selection and stable returns."

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