TIGER US Dividend Dow Jones ETF net assets reach 4.2 trillion won
Retail investors net-purchased 115.6 billion won in the past month
Covered-call pairing splits distributions between mid- and end-of-month payouts
As global market volatility intensifies, a dividend investment strategy that delivers distributions twice a month is drawing fresh attention. The approach combines US dividend stocks with a covered-call strategy through ETFs, splitting cash flows between mid-month and end-of-month payouts.
According to Mirae Asset Global Investments, the net assets of the TIGER US Dividend Dow Jones ETF stood at 4.28 trillion won ($3.15 billion) as of Monday, making it the largest among domestically listed US Dividend Dow Jones-linked ETFs.
The US Dividend Dow Jones index selects companies with strong dividend sustainability and financial health by evaluating factors including at least 10 consecutive years of dividend history, five-year dividend growth rates, return on equity and debt-to-cash-flow ratios. The strategy aims for long-term dividend growth while avoiding the "yield trap" — the risk of mounting losses from share price declines that can accompany high-dividend investing.
The fund also spreads exposure across a range of sectors, including energy, consumer staples and healthcare, reducing reliance on any single industry.
Retail investors net-purchased 115.6 billion won worth of the TIGER US Dividend Dow Jones ETF over the past month, according to Koscom. The surge in demand reflects a shift toward dividend stocks that offer stable cash flows as rising oil prices and interest rate movements have amplified market volatility.
Mirae Asset Global Investments has proposed an investment strategy that combines US Dividend Dow Jones exposure with covered-call ETFs to receive distributions both mid-month and at month-end.
Holding both the TIGER US Dividend Dow Jones Target Daily Covered Call ETF and the TIGER US Dividend Dow Jones Target Covered Call 2 ETF allows investors to stagger distribution dates across the month. Reinvesting those distributions also creates a source of funds for additional purchases during market downturns.
The TIGER US Dividend Dow Jones Target Daily Covered Call ETF uses daily options selling to target annual option premium income of around 10 percent, with distributions paid in the middle of each month. The TIGER US Dividend Dow Jones Target Covered Call 2 ETF reduces the options-selling ratio to increase participation in underlying asset gains while also targeting annual distributions of around 10 percent, with payouts at month-end.
"In a market of heightened volatility, what matters more than predicting short-term share price moves is having a strategy that lets you invest consistently regardless of market swings," said Lee Jeong-hwan, head of the strategic ETF management division at Mirae Asset Global Investments. "Combining the dividend growth potential of the US Dividend Dow Jones index with the option premiums of a covered-call strategy allows investors to pursue regular cash flows while staying responsive to market changes."
moon@heraldcorp.com
