Samsung Asset Management to List KODEX US Dividend Dow Jones Active ETF

Samsung Asset Management is launching an actively managed exchange-traded fund (ETF) that combines the U.S. Dividend Dow Jones Index, a leading dividend growth index, with fund managers' qualitative analysis and an on-demand rebalancing strategy.

On October 19, Samsung Asset Management announced that it will list the KODEX US Dividend Dow Jones Active ETF on October 20. The ETF will make monthly distributions at the end of each month.

The U.S. Dividend Dow Jones Index has attracted Korean investors by diversifying investments across around 100 high-quality companies that have paid dividends for at least 10 years. However, its annual reconstitution schedule and stock-selection approach centered on quantitative indicators have been criticized for making it difficult to promptly reflect changes in the macroeconomic environment or in companies' shareholder-return policies. In particular, the index has a structural drawback: high-quality growth stocks can be removed after a sharp rise in their share prices lowers their relative dividend yields, while companies with deteriorating fundamentals can be included when a steep share-price decline makes their dividend yields appear artificially high.

To address these limitations, the KODEX US Dividend Dow Jones Active ETF aims to begin trading with a more concentrated portfolio of around 70 key high-quality stocks than the existing index and to manage it actively. It will rebalance as needed after comprehensively assessing changes in companies' earnings estimates and their structural growth prospects.

"If the U.S. Dividend Dow Jones Index is a well-made map updated once a year, this product is like adding a smart navigation system on top of that map," said Han Dong-hoon, a manager at Samsung Asset Management. "By adding flexibility to a stable foundation, it will be a reliable alternative for investors seeking both stability and flexibility in dividend investing."

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