Shinhan Asset Management's "SOL Global Gold Covered Call Active" ETF Delivers 4.38% Annual Distribution Rate

Amid heightened volatility in the global financial markets and concerns about the value of the U.S. dollar, a unique gold covered call exchange-traded fund (ETF) is drawing attention in South Korea. This ETF allows investors to gain exposure to gold—a representative safe-haven asset—while also providing regular monthly dividends.

On September 7, Shinhan Asset Management announced that net buying by individual investors continues for the "SOL Global Gold Covered Call Active" ETF, which enables investors to participate in more than 90% of international gold price increases and seeks monthly distributions by utilizing option premiums.

Recently, as volatility in the global financial markets has increased, demand for investing in gold, a traditional safe-haven asset, has also been growing. Ongoing concerns about the fiscal soundness of the United States and instability in the value of fiat currencies—including the dollar—have created a favorable environment for gold prices.

This shift is also reflected in the behavior of domestic investors. After a slowdown in gold ETF net purchases following a price correction earlier this year, the trend has reversed as gold prices have found a bottom and begun to rebound. Net buying by individual investors in the SOL Global Gold Covered Call Active ETF has continued over the past month. This trend is attributed not only to expectations of rising gold prices, but also to investors seeking to reduce the volatility of stock-focused portfolios and enhance asset allocation effects.

The SOL Global Gold Covered Call Active ETF allows investors to participate in over 90% of international gold price increases and distributes monthly payments sourced from option premiums secured through a covered call strategy. Unlike typical covered call products—which significantly lower participation in price increases to achieve higher distribution rates—this ETF maintains a limited proportion of call option sales to maximize participation in gold price appreciation. Over the past year, the average dividend paid has been 45 won per share, with an annual distribution rate of approximately 4.38%. In August, a dividend of 46 won per share was paid.

Kim Junghyun, Head of the ETF Business Group at Shinhan Asset Management, stated, "Gold’s role is expanding beyond a traditional safe-haven against geopolitical risks to serve as a strategic asset to hedge against U.S. fiscal instability and declining currency values. If expectations for rate cuts and U.S. dollar weakness are realized, this could provide additional momentum for gold prices." He added, "The SOL Global Gold Covered Call Active ETF is a suitable choice for investors looking to include gold in stock- and bond-centric portfolios to enhance diversification effects, and who also want regular monthly distributions."

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