High Dividend Yield and Caution in Covered Call ETFs
TSLY Covered Call ETF yields a substantial 73.8% dividend, aiming for stability through writing call options, though investors must be wary of unexpected risks. It is crucial to carefully examine the underlying assets and strategies, with recommendations for a more conservative investment approach at this time. The Financial Supervisory Service (FSS) has advised renaming covered call ETFs listed in the US and Korea to prevent investor misconceptions about expected returns.
Starting tomorrow, in compliance with FSS guidelines, multiple asset management firms will rebrand their covered call ETFs. Firms like Mirae Asset Global Investments, Samsung Asset Management, and Korea Investment Management among 17 affected products. This name change aims to prevent investor confusion. Despite this, individual investor demand remains strong, and the need for monthly income products is expected to rise due to an aging society. Target Premium Covered Call ETFs continue to attract many investors with their high distributions.
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