Hanwha Asset Management Lists 'PLUS 200 Covered Call Active' ETF

Participation in KOSPI Upside and Downside Risk Mitigation
Dynamic Adjustment of Option Writing Proportion by Market Conditions
Differentiation Through Dividend Avoidance Strategy

Hanwha Asset Management announced on the 23rd that it will newly list the "PLUS 200 Covered Call Active" Exchange Traded Fund (ETF), which combines active option writing and dividend avoidance strategies with investment in the KOSPI 200.

The PLUS 200 Covered Call Active ETF is a monthly dividend covered call product that invests in KOSPI 200 constituent stocks and uses a call option writing strategy to pursue monthly cash flows. The dividend record date is set as the last business day of each month.

The most distinctive feature of this product is its active covered call strategy, which dynamically adjusts the proportion of option writing, strike prices, and maturities depending on market conditions. Typical passive covered call strategies have predetermined ratios for call option writing and target premiums, which can limit responsiveness to market changes. By contrast, this ETF reduces the proportion of call option writing in anticipated bull markets to increase participation in KOSPI 200 upside, and increases the writing proportion in expected bear markets to maximize option premium income and mitigate downside risk.

In addition, the fund utilizes a dividend avoidance strategy to enhance post-tax efficiency of monthly distribution sources. The dividend avoidance strategy involves selling held stocks before the ex-dividend date, thereby not directly receiving dividends. Instead, it repurchases shares at a lower price after the ex-dividend date, aiming for capital gains that are reflected in the net asset value. This approach reduces the proportion of stock dividends, which may be subject to taxation, while expanding tax-exempt sources of distribution such as option premiums and capital gains.

The active strategy also allows for immediate utilization of KOSPI 200 daily options once they are introduced. Currently, discussions are underway for introducing daily options in the KOSPI 200 options market. If implemented, these daily options would allow for more frequent option writing with shorter maturities, enabling even more precise management according to market conditions.

Kim Jungsub, Head of the ETF Division at Hanwha Asset Management, stated, "The PLUS 200 Covered Call Active ETF is designed to participate in the upside of the KOSPI 200 while maximizing post-tax distributions through the dividend avoidance strategy. By moving beyond the conventional covered call approach of selling options according to fixed rules, this next-generation covered call investment solution aims to actively adjust strategies in response to market changes."

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