Rise in Dollar ETF Yields and Samsung Asset Management's Market Dominance
The persistent strong dollar phenomenon is leading to increased yields for dollar futures investment ETFs and SOFR rate-linked ETFs. As the volatility of the USD/KRW exchange rate rises, investors are increasingly favoring currency-exposed ETFs, thereby widening yield disparities. For instance, U.S. Dollar Futures Leverage ETF yields have surged over 5%, garnering significant investor attention.
Samsung Asset Management's KODEX U.S. Money Market Active and KODEX U.S. SOFR Rate Active ETFs have each reached net assets of 5.026 trillion and 5.081 trillion KRW, together surpassing the 1 trillion mark. This is attributable to the opportunity to achieve currency gains by investing in dollar assets, coupled with the allure of monthly dividends. Notably, the KODEX U.S. Money Market Active offers an attractive expected yield of 4.33% per annum, making it a compelling choice. It diversifies investments across various short-term financial products to mitigate risks.
Conversely, KODEX U.S. SOFR Rate Active is popular among risk-averse investors by providing a real-time yield linked to SOFR, at an annual rate of 3.95%. Manager Shin Hyun-jin expressed that during periods of dollar strength, the appeal of these short-term dollar investment products rises, with monthly dividends receiving positive responses from investors. This trend is likely to continue as long as the strong dollar persists.
Hanwha Asset Management Launches 'PLUS China Hang Seng Tech Weekly Target Covered Call ETF'
Hanwha Asset Management has announced the launch of the 'PLUS China Hang Seng Tech Weekly Target Covered Call ETF'. This ETF aims to invest in 30 innovative growth stocks included in the Hang Seng Tech Index, with a target annual distribution of 15%. By selling call options, the ETF provides roughly 20% participation in index growth while expecting substantial returns through 80% premium gains.
The ETF stands to benefit from supporting policies of the Chinese government, perceived undervaluation of market valuation, and increasing capital inflows, enhancing its attractiveness to investors. Notably, the strategy of weekly option selling is aimed at generating stable cash flows, offering an appealing investment opportunity. Key holdings include major Chinese tech companies like Alibaba and Tencent, which draw significant interest from investors.
Through an efficient investment strategy, the ETF aims to create stable cash flows and predicts high premiums, boosting its competitiveness compared to U.S. indices. These characteristics have positioned Hanwha Asset Management's new ETF as a notable highlight among both domestic and international investors.
Increased Interest in High-Dividend Stocks and ETFs
Amid discussions on government plans to reduce dividend income tax, there is a rising interest among investors in high-dividend stocks and ETFs. Notably, the KOSPI High Dividend 50 Index and the KOSPI Dividend Growth 50 Index have outperformed the KOSPI index this month, with gains of 5.83% and 4.68%, respectively. The investment sentiment towards high-dividend financial stocks has also strengthened, seeing the KOSPI 200 Financial High Dividend TOP 10 Index rising by 9.56% this month. This performance seems driven by investor optimism about potential tax reforms lowering the highest dividend income tax rate from 35% to 25%.
However, concerns about the ongoing tech stock rally cannot be ignored. As financial stocks may become relatively sidelined compared to tech stocks, investors with diversified stock portfolios need to remain vigilant about these market dynamics. Thus, cautious strategies would be prudent amid such rapidly evolving market scenarios.
In a related event, Shinhan Asset Management’s flagship high-dividend ETFs, SOL Financial Group Plus High Dividend and SOL Korea High Dividend, caused some concern by selling a portion of their holdings to distribute dividends. This action led to misunderstandings among investors; however, Shinhan Asset Management clarified that it was not a capital impairment but a distribution within the dividend resources.
Mirae Asset Global Investments Launches Special TIGER ETF Event for Pension Investors
Mirae Asset Global Investments has announced the launch of a special 'TIGER ETF Pension Account Purchase Event' aimed at pension investors for the end of the year. The event targets investors with pension savings, Defined Contribution (DC), and Individual Retirement Plan (IRP) accounts, offering the opportunity to receive prizes by purchasing certain quantities of eight types of TIGER ETFs and then verifying their purchases. The likelihood of winning increases as more participants join, with up to a 50% chance of winning for a maximum of 5,000 participants.
The prizes are to be awarded through a lottery system, consisting of a 'Crispy Six-pack+Cheese Ball' set, adding a unique touch of enjoyment. This initiative is designed to provide additional benefits for investors during the year-end, especially appealing to pension investors who might be interested in exploring various investment options. The event is expected to positively encourage investors to engage more actively in ETF investments.
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