[Provided by CSOP Asset Management]
[Provided by CSOP Asset Management]

Hong Kong-based CSOP Asset Management has launched a covered-call ETF on the Hong Kong Stock Exchange with the KOSPI 200 as its underlying asset.

The company said Friday it listed the CSOP KOSPI 200 Covered Call Active ETF on the Hong Kong Exchanges and Clearing (HKEX).

The ETF was priced at approximately HK$7.8 (1,425 won) per share, with a minimum trading unit of 100 shares. The total expense ratio is 0.99% per year.

The fund employs an active covered-call strategy, tracking the index's returns through KOSPI 200 futures while selling KOSPI 200-related call options to generate option premium income. It is an income-oriented product designed to pay monthly distributions funded by those premiums.

CSOP Asset Management said elevated volatility in the South Korean equity market has enhanced the investment appeal of covered-call strategies, noting that option premiums generally rise as market volatility expands. With the KOSPI 200's annualized volatility reaching 60.1%, the KOSPI 200 covered-call strategy has posted a year-to-date return of 25.4%.

"By generating option premium income, the strategy can provide a degree of buffer during market downturns compared with holding the KOSPI 200 index alone," the company said.

Capital inflows into the space have also been strong. Global KOSPI 200 covered-call ETFs recorded net inflows of approximately 10.5 billion Hong Kong dollars in the first quarter of this year alone.

Ding Chen, CEO of CSOP Asset Management, said the fund "will offer investors an income-focused solution that delivers monthly distributions and enhances portfolio resilience amid volatility in the Korean market."

CSOP Asset Management was also the first in the world to list single-stock leveraged ETFs tracking Samsung Electronics and SK Hynix, a milestone it achieved last year.


moon@heraldcorp.com