Hanwha Asset Management Lists New PLUS 200 Weekly Covered Call Bond Hybrid ETF

Hanwha Asset Management announced on June 2 that it would list a new exchange-traded fund (ETF), "PLUS 200 Weekly Covered Call Bond Hybrid," on the Korea Exchange. This ETF is designed to participate in the upside of the KOSPI 200 while providing investors with the potential for stable monthly dividend income.

This product is a bond hybrid ETF that invests 50% in the KOSPI 200 and 50% in three-year Korean Treasury Bonds. A key feature is that, under current regulations, it is not subject to the investment limit on risky assets within retirement pension (DC·IRP) accounts.

At the same time, the ETF adopts a monthly dividend covered call strategy by selling call options on the KOSPI 200 to generate distribution income, targeting an annual payout of around 7%. It is designed for investors seeking to maximize their exposure to the KOSPI 200 within their retirement pension accounts, enjoying both returns from index gains and stable monthly cash flows.

This ETF sells call options with only 10% of its assets. The lower the proportion of call option sales, the higher the participation in the KOSPI 200's gains. As a result, when the KOSPI 200 rises, the ETF is expected to follow approximately 40% of the index’s upside.

Tax benefits are also noteworthy. Because most of the distributions are tax-exempt, even investors using regular accounts face relatively low burdens from the progressive comprehensive financial income tax, which applies when annual financial income exceeds 20 million won. Most of the distribution sources for the PLUS 200 Weekly Covered Call Bond Hybrid ETF (estimated at around 6 percentage points) come from option premium income, which is categorized as capital gains from domestic listed derivatives and is thus tax-exempt. Bond interest and stock dividends, which make up a smaller portion of the distributions (estimated at around 1 percentage point), are subject to a 15.4% dividend income tax. Tax-exempt distributions are not included in total financial income calculations.

Kim Jeongseop, Head of ETF Business at Hanwha Asset Management, stated, "The PLUS 200 Weekly Covered Call Bond Hybrid ETF is optimized for investors who want to increase their KOSPI exposure within retirement pensions or reduce their comprehensive financial income tax burden while generating steady monthly cash flows." He added, "It will be a good option for investors who want to participate in the KOSPI's upward rally while minimizing volatility."

This content was produced with the assistance of AI translation services.