Mirae Asset Global Investments Publishes 'TIGER ETF Tax-Saving Investment Guidebook'

Comparison of Tax-Advantaged Accounts, Including Brokerage-Type ISAs and Pension Savings
ETF Investment Strategies by Generation and Income Bracket

Mirae Asset Global Investments announced on November 3 that it had published the “TIGER ETF Tax-Saving Investment Guidebook” to help ETF investors make effective use of tax-advantaged accounts.

As the ETF market has grown, the total net assets of domestic ETFs reached approximately 427 trillion won as of the end of October, while the number of listed ETFs stood at 1,183. However, because ETFs are as easy to trade as stocks, investors can easily overlook taxes. Under tax law, ETFs are classified as funds. Domestic equity ETFs are subject to a 15.4% dividend income tax only on distributions, while other products are taxed at the same rate on both capital gains and distributions. For example, if an investor puts 10 million won into a Korea-listed overseas index ETF and earns a 40% return, the after-tax return is 33.8% after deducting 616,000 won in taxes.

The guidebook’s core message is, “A real return means making tax savings part of the equation!” Asset allocation determines which assets to invest in, while asset location determines whether to hold those assets in a regular account, a brokerage-type Individual Savings Account (ISA), or a pension account. Since the after-tax return on the same ETF can vary depending on the account, choosing the right account is just as important as choosing the right ETF.

The guidebook first outlines tax-saving basics that ETF investors should know. Capital gains on domestic equity ETFs that hold only Korea-listed stocks are tax-exempt, while capital gains on overseas equity, bond, and physical gold ETFs are subject to a 15.4% tax. The more heavily taxed an ETF is, the more reason there is to hold it in a tax-advantaged account. In addition, taxes are withheld each time an ETF’s monthly distribution is paid. Holding the ETF in a pension account or another account that defers taxation can increase the principal available for reinvestment.

The guidebook compares the features of major tax-advantaged accounts, including brokerage-type ISAs, pension savings funds, retirement pension accounts (DC and IRP), and Productive Finance ISAs, and recommends TIGER ETFs for each account type. It also covers ways to use these accounts for different generations based on investment horizons, account strategies tailored to income brackets and monthly investment capacity, and 10 frequently asked questions. An appendix introduces 33 recommended TIGER ETFs and highlights how each product can be used in tax-advantaged accounts.

To mark the publication of the guidebook, a download event will run through November 30. Readers can download the guidebook for free from the TIGER ETF website and enter through the event application page. One hundred winners will be selected by lottery to receive mobile gift vouchers.

A live introduction to the guidebook will also be held at 5 p.m. on November 18 on the official TIGER ETF YouTube channel, “Smart Tiger.” The live session will cover the guidebook’s key points and how to use TIGER ETFs in different tax-advantaged accounts.

“Many investors carefully compare which ETFs to buy, but give relatively less thought to which accounts to hold them in,” said Kim Sujeong, head of the Content Division at Mirae Asset Global Investments. “We hope this guidebook will help investors understand that asset location matters as much as asset allocation and choose tax-advantaged accounts suited to their needs to improve their after-tax returns.”

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