Three "TIGER US Target Daily Covered Call" ETFs Surpass 1 Trillion Won in Individual Net Purchases Year-to-Date

Net Assets of Covered Call ETFs Tracking Major US Indices Reach 3.6 Trillion Won

Twice-Monthly Cash Flow Possible With Mid-Month and End-of-Month Distribution Combination

Mirae Asset Global Investments announced on October 7 that the cumulative net purchases by individual investors of three "TIGER US Target Daily Covered Call" exchange-traded funds (ETFs), which are based on the three major US benchmark indices, have surpassed 1 trillion won since the beginning of the year.

According to the Korea Exchange, the year-to-date net purchases by individual investors for the TIGER US Nasdaq 100 Target Daily Covered Call ETF totaled 828.6 billion won, the TIGER US S&P 500 Target Daily Covered Call ETF recorded 149.5 billion won, and the TIGER US Dividend Dow Jones Target Daily Covered Call ETF reached 120 billion won. The combined total for all three products amounts to 1.098 trillion won. The aggregate net asset value (NAV) of the three ETFs stands at 3.5875 trillion won.

Covered call ETFs generate distribution funds by selling call options while holding the underlying assets. However, since the net asset value of the ETF decreases with each distribution payment, the long-term performance of the underlying assets is a crucial factor determining total returns. Therefore, when selecting a covered call ETF, it is important to consider not only the distribution rate but also the growth and long-term performance of the underlying assets.

Each of the three products utilizes a major US benchmark index as its underlying asset. The TIGER US S&P 500 Target Daily Covered Call ETF invests broadly in large-cap US stocks, the TIGER US Nasdaq 100 Target Daily Covered Call ETF targets innovative growth companies such as those in artificial intelligence and semiconductors, and the TIGER US Dividend Dow Jones Target Daily Covered Call ETF focuses on stocks selected for dividend growth and financial soundness.

In addition, the three TIGER US Target Daily Covered Call ETFs have been designed to preserve the growth potential of the underlying assets as much as possible. Unlike traditional covered call strategies, which sell options on 100% of their holdings, these ETFs sell daily options with only about 10% coverage, thereby participating in approximately 90% of the gains of the reference index while still securing premium income for distributions.

The record dates for distributions also vary. The S&P 500 and US Dividend Dow Jones products use mid-month as the distribution record date, while the Nasdaq 100 product uses the end of the month. Therefore, investors who hold all three products can expect to receive distributions twice a month. Notably, the TIGER US S&P 500 Target Daily Covered Call ETF recently changed its distribution record date from the end of the month to mid-month, and it allocates not only option premiums but also the dividend income from included stocks as distribution funds.

Lee Junghwan, Head of Strategic ETF Management at Mirae Asset Global Investments, stated, "Covered call ETFs are products where the long-term growth of the underlying assets is extremely important. By combining a target daily covered call strategy with the three major US indices, which are suitable for long-term retirement investing, we have designed these ETFs to pursue both growth potential and cash flow."

He added, "By properly combining the mid-month and end-of-month distribution record dates, investors can receive distributions twice a month, which will be a practical help in designing their cash flow plans."

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