Samsung Asset Management: "Receive Distributions Twice a Month with Covered Call ETFs"

An investment portfolio that provides “twice-monthly cash flow” by receiving distributions both mid-month and end-of-month, using Korea’s flagship index-based covered call Exchange Traded Funds (ETFs), is drawing attention.

On October 1, Samsung Asset Management introduced an ETF investment combination that enables investors to receive distributions twice a month and enjoy tax benefits by utilizing covered call ETFs that track major Korean indices.

KODEX 200 Target Weekly Covered Call is an ETF that pays distributions on the 15th of every month. It uses the KOSPI 200 index as its underlying asset and pursues an annual option premium income of about 15% through weekly call option sales. In addition, it offers a dividend yield of approximately 2% from investments in KOSPI 200 constituents, resulting in a total annual distribution of about 17%. Currently, its net assets stand at 5.9166 trillion won, making it the largest covered call ETF in Korea. Since its listing in December 2024, cumulative net purchases by retail investors have reached 3.8447 trillion won. The fund’s return for the past year is 106.6%, and its year-to-date return is 68.6%.

KODEX 200 Covered Call Active pays distributions at the end of each month. It is an advanced covered call ETF that incorporates active strategies based on the management know-how from KODEX 200 Target Weekly Covered Call. Rather than restricting itself to weekly options, it utilizes options with various maturities and applies active stock management strategies by increasing the weighting of leading sectors. Its net assets amount to 953.9 billion won. Since its listing in July this year, cumulative net purchases by retail investors have reached 858.4 billion won, ranking first among newly listed ETFs in the second half of the year by net retail purchases.

By investing in these two covered call ETFs, investors can receive distributions twice a month—mid-month and end-of-month. At the same time, since these funds invest in Korean equities, they offer significant tax advantages. The main source of distribution, the option premium, is exempt from taxation and is not subject to comprehensive financial income taxation. Capital gains from trading Korean stocks are also tax-exempt.

Jung Jae-uk, Team Leader of ETF Management Division 3 at Samsung Asset Management, said, “Korean equity covered call ETFs are highly attractive to investors seeking higher after-tax cash flow as option premium income is tax-exempt. Receiving distributions twice a month allows for a more stable cash flow, and investors can efficiently manage their assets while also benefiting from the upside of the Korean indices.”

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