Shinhan Asset Management Pays July Dividend for 'SOL 200 Target Weekly Covered Call ETF'

Shinhan Asset Management announced on August 3 that it paid a monthly dividend of 150 won per share for July from the “SOL 200 Target Weekly Covered Call” exchange-traded fund (ETF). The payout ratio for this month recorded 1.49% based on the closing price on July 29, the day before the ex-dividend date.

This product uses the KOSPI 200 Index as its underlying asset and secures option premium by selling weekly call options. It combines this with dividend income from KOSPI 200 constituents to generate regular monthly dividend resources.

Recently, as volatility in the Korean stock market has increased, demand for stable monthly cash flows has surged, accelerating fund inflows into covered call products. According to the Korea Exchange, individual net purchases of covered call ETFs listed on the domestic market reached approximately 1.8 trillion won in July alone. Thanks to this trend, the SOL 200 Target Weekly Covered Call ETF also achieved cumulative individual net purchases of 655.2 billion won since its listing in March.

Kim Junghyun, Head of the ETF Business Group at Shinhan Asset Management, stated, “In July, the intraday volatility of the KOSPI expanded to record-high monthly levels, leading investors to stay in the market and seek monthly cash flow rather than withdraw. The inflow of individual investor funds into monthly distribution-type ETFs—especially covered call products based on the KOSPI 200—reflects the same trend.” He added, “SOL 200 Target Weekly Covered Call maintains the strengths of the domestic target covered call strategy while also adopting a distribution-at-the-beginning-of-the-month structure, making it more convenient for investors to manage their cash flow.”

The target covered call strategy utilizes only a portion of the asset to seek a target premium, unlike general covered call approaches. This allows for flexible adjustment of the proportion of options written, enabling higher market participation when the underlying asset rises. As such, investors seeking monthly distributions can secure stable premium income while reducing the risk of being left out during market rallies, which is a key advantage.

In addition, domestic option premium income is not subject to taxation under Korean tax law and is also excluded from comprehensive financial income taxation, making it attractive from a tax-saving perspective. When investing with a general securities account, investors can pursue stable monthly cash flows while facing lower tax burdens compared to overseas covered call products. However, dividend income from investments in KOSPI 200 constituents is still subject to dividend income tax.

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