Hanwha Asset Management's 'Hanwha High Dividend Plus WRAP' Proves Resilience Amid Market Volatility

In a market environment where the volatility of the Korean stock market has reached its peak, "Hanwha High Dividend Stock Plus Wrap" from Hanwha Asset Management has drawn attention as a strong investment alternative, demonstrating resilience in down markets by minimizing losses and delivering stable returns.

On August 21, Hanwha Asset Management announced that the Hanwha High Dividend Stock Plus Wrap had exhibited strong returns and downside protection, even during the recent volatile Kospi swings.

From its inception on January 19 through July 24, the Hanwha High Dividend Stock Wrap maintained its maximum drawdown (MDD) significantly lower than that of the Kospi, effectively limiting losses. This differentiated performance can be attributed to the expertise of a dedicated team that has managed "PLUS High Dividend Stock"—Korea’s first-generation high-dividend ETF listed in 2012—for 14 years. The management team selects stocks based on a long-accumulated understanding of dividend cycles and company-specific dividend policy data. Leveraging the flexible wrap structure, which allows for dynamic adjustment of stock weights, they actively rebalance the portfolio in response to market conditions and company events. For example, on May 28, the team immediately reflected the outcome of the Monetary Policy Committee in the portfolio by increasing the allocation to financial holding companies. Subsequently, on June 5, they promptly reduced the allocation to certain stocks in the retail sector to address industry-specific developments, exemplifying their agility in reacting to market changes.

Going forward, the company plans to maintain a stable portfolio focusing on the financial holding sector, which is characterized by a low risk of earnings deterioration and a strong commitment to shareholder returns. In conjunction with interim earnings reports, Hanwha Asset Management intends to conduct a comprehensive review of companies’ fundamentals and shareholder return policies—including share buybacks and cancellations—to dynamically adjust portfolio weights.

Unlike ETFs or mutual funds, a wrap account structure allows investors to directly own individual stocks, making them eligible for 100% separate taxation on dividend income. Accordingly, in today’s high-dividend investment environment—where not only dividend yield but also after-tax returns are crucial—the structural advantages of wrap accounts are expected to become even more prominent.

A representative from Hanwha Asset Management stated, "Even in a market where volatility has greatly increased, the Hanwha High Dividend Stock Wrap maintained strong returns while significantly limiting drawdowns during downturns. This is a key competitive advantage," adding, "Rather than merely selecting stocks with high dividend yields, we also consider the sustainability of shareholder return policies and after-tax real returns when making investment decisions."

Investors can sign up for the Hanwha High Dividend Stock Plus Wrap at branches or through the mobile applications of Korea Investment & Securities, Shinhan Investment Corp., and Kyobo Securities. The contract automatically renews on an annual basis.

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