ACE 'Daily Target Covered Call' ETFs Surpass 100 Billion Won in Individual Net Purchases This Year

Combined Individual Net Purchases Reach 106.7 Billion Won
ACE US Covered Call ETFs Lead Overseas Category in Returns

Korea Investment Management announced on August 31 that combined net individual purchases of the three ACE Daily Target Covered Call ETFs have surpassed 100 billion won since the beginning of the year.

The three products are the ACE US 500 Daily Target Covered Call (Synthetic) ETF, ACE US Big Tech 7+ Daily Target Covered Call (Synthetic) ETF, and ACE US Semiconductor Daily Target Covered Call (Synthetic) ETF. Their combined net individual purchases amounted to 106.7 billion won.

Analysts attribute this capital inflow to the recently heightened stock market volatility. As market uncertainty grows, there has been increased demand from investors seeking to hedge downside risks and generate stable cash flow through option premiums. In June, the company also introduced a more flexible distribution policy to actively return accumulated assets and operational results to investors, allowing for a special distribution of up to 3%. This policy shift is seen as another driver of increased individual investor buying.

According to the Korea Exchange, in particular, the ACE US Semiconductor Daily Target Covered Call (Synthetic) ETF achieved an annual return of 45.96% over the past year, ranking first among overseas-type covered call ETFs in terms of performance.

Dividend (distribution) performance has also been strong. Over the past year, the cumulative distribution per share for the three ETFs ranged from 1,879 to 3,174 won, with the annual cumulative distribution yield standing between 17.48% and 20.55%. By ETF, the ACE US Semiconductor Daily Target Covered Call (Synthetic) ETF recorded an annual cumulative distribution yield of 20.55%, while the ACE US 500 Daily Target Covered Call (Synthetic) ETF and ACE US Big Tech 7+ Daily Target Covered Call (Synthetic) ETF reported 17.48% and 20.54%, respectively.

Yongsoo Nam, Head of ETF Division at Korea Investment Management, stated, "As market volatility remains elevated, the demand for covered call ETFs, which can provide downside protection and stable monthly distributions, is expected to continue for the time being. The three ACE Daily Target Covered Call ETFs are composed of carefully selected underlying assets expected to trend upward over the long term, helping to mitigate the typical upper limit constraints of covered call strategies."

Nam added, "However, if the underlying index drops sharply, there is a risk of principal loss. Therefore, it is essential to thoroughly compare the future growth potential of the products and the option strategies before making investment decisions."

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