ETF invests in core value-up companies, pays monthly distributions
Call option sales capped at 30%; one-year return reaches 99%
KB Asset Management said Friday its RISE Korea Value-Up Weekly Fixed Covered Call ETF has surpassed 300 billion won ($219 million) in net assets while maintaining a monthly distribution rate in the 3 percent range.
The ETF has paid monthly distributions since its listing in September last year. Its per-share distribution over the past year stands at 4,200 won, for a distribution rate of 24.69 percent. The fund posted distribution rates in the 3 percent range for three consecutive months — 3.22 percent in July, 3.21 percent in August and 3.08 percent in September.
The product invests in all 100 constituents of the Korea Value-Up Index and employs a covered call strategy that sells KOSPI 200 call options twice a week at a fixed 30 percent of held assets.
By capping call option sales at 30 percent, the fund channels the option-sale premium into distribution support, while the remaining 70 percent is designed to participate in the underlying assets' share price gains.
Monthly distributions are funded by option-sale premiums, dividends and interest income. As a domestic equity ETF, it is exempt from dividend income tax on capital gains and option premium income. The annual management fee is 0.30 percent, and the fund is available through individual pension and retirement pension accounts.
Major holdings include SK hynix (20.12 percent), Samsung Electronics (16.14 percent), SK Square (7.82 percent), KB Financial Group (4.48 percent), Hyundai Motor (4.10 percent), Shinhan Financial Group (3.81 percent), Hanwha Aerospace (2.86 percent), Hana Financial Group (2.80 percent) and Kia (2.46 percent).
The RISE Network Infrastructure ETF has also posted strong returns. KB Asset Management said the fund ranked first among domestic equity ETFs in six-month returns. According to fund evaluator FnGuide, the ETF's six-month return as of Aug. 26 stood at 67.24 percent — the highest among 398 domestic equity ETFs. The fund invests in key companies across the network infrastructure value chain, including makers of 5G telecommunications equipment, base station equipment and subscriber network equipment.
th5@heraldcorp.com
